An analysis of certain issues relating to the taxation of equity instruments

This article examines certain issues associated with Section 8C and other related sections of the Income Tax Act. The issues examined relate to: the difference in tax treatment of restricted and unrestricted equity instruments; possible inequitable tax treatment where an employee receives both an interest free or low interest loan and an equity instrument from an employer and also where a taxpayer receives an equity instrument as trading stock; and the donations tax implications of the donation of a restricted equity instrument.