CRA finds that s. 39(1.1) extends to individuals’ FX bank deposits

CRA reversed its position in 2017-0712621C6 F that s. 39(1.1) was essentially restricted to bills and coins and did not extend to dispositions of foreign currencies held on deposit at a financial institution by an individual. After noting that, in addition to a more technical meaning, “currency” also could refer “simply to ‘money’ that is used in a country, with the definition of ‘money’ including sums in a bank account,” CRA stated:

[I]n the context of subsection 39(1.1), the phrase “dispositions of currency other than Canadian currency” includes situations where foreign currency funds in a chequing or current deposit account, which entitles the depositor to withdraw the currency on deposit at any time, are converted into another currency or used to make a purchase or a payment.

Neal Armstrong. Summary of 27 October 2023 Internal T.I. 2020-0868031I7 under s. 39(1.1).