Unclaimed proceeds of disposition

Unclaimed proceeds of disposition are proceeds of disposition you get in a tax year for a person (the beneficial owner) who remains unknown at the end of your next tax year. If you still hold unclaimed proceeds then, you have to deduct a specified percentage of tax from these amounts and send it to the receiver general within 60 days.

Remittances

To calculate the tax, subtract any outlays and expenses relating to the disposition of the property from the proceeds of its disposition (if you did not deduct the outlays and expenses in calculating your income). Multiply the result by 50%. Send the tax withheld with a statement showing the period covered, net proceeds, and amount of tax deducted. Send the payment and statement separately from any T5008 information return you may be filing.

Penalties apply if you do not send amounts withheld. For a first failure in a calendar year, the penalty is 10% of the amount that was withheld but not sent. A second or later failure in the same calendar year could result in a penalty of 20% of the amount that was withheld but not sent.

We will charge you interest on amounts that you do not send as required. Interest accrues at a prescribed rate from the required date of remittance to the date you send it and is payable to the receiver general.

Reporting requirements

If you hold an unclaimed amount and you later identify the beneficial owner and pay the amount, you have to prepare a separate T5008 information return. In this case, prepare a separate T5008 Summary and related T5008 slips for the applicable tax year to report the proceeds paid and the tax withheld. The beneficial owner has to calculate the amount of income from these securities transactions and include it in income for the calendar year shown on the T5008 slip. The beneficial owner can claim as a credit the tax you withheld. A non-resident will generally claim the credit in the same way as a resident.

In some cases, you can pay unclaimed proceeds of disposition received in different calendar years to the same beneficial owner in one lump sum. If so, you have to prepare separate T5008 slips for each calendar year in which you received the proceeds.

You also have to report the amount of tax withheld on the T5008 slip. Identify the amount as "TAX WITHHELD" and enter it directly below the recipient's name and address. Enter "UNCLAIMED PROCEEDS OF DISPOSITION ACCOUNT" directly below the name and address of the trader or dealer in securities.

Forms and publications

• Form T5008, Statement of Securities Transactions
• Form T5008SUM, Return of Securities Transactions

Date modified:

2016-01-07