Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: Does the transfer of shares from an Employee Share Purchase Plan to an RRSP constitute a sale for purposes of T5008 reporting under Regulation 230(2)?
Position: No.
Reasons: This position is confirmed in 94-110 Handbook on Securities Transactions.
XXXXXXXXXX 2001-007530
P. Kohnen
November 2, 2001
Dear XXXXXXXXXX:
Re: Request for technical interpretation - T5008 Reporting
This is in reply to your facsimile submission of March 16, 2001, requesting our views regarding the reporting of certain transfers of shares from an unregistered employee share purchase plan ("ESPP") to a registered retirement savings plan ("RRSP") at another financial institution or to an RRSP for which your company is the trustee.
Subsection 230(2) of the Income Tax Regulations (the "Regulations") requires every trader or dealer in securities who sells a security as agent for a vendor to report the transaction using form T5008 - Statement of Securities Transactions. With the exception of the limited definition of a "sale" in Regulation 230(1), which simply states that a sale includes the granting of an option and a short sale, the Income Tax Act (the "Act") is silent as to what constitutes a sale. Accordingly, we would refer to its ordinary meaning. The Oxford English Dictionary defines a sale as an "exchange of a commodity for money or other consideration". Similarly, Black's Law Dictionary refers to a "transfer of property ... for consideration".
The Handbook on Securities Transactions, which is available on the Canada Customs and Revenue Agency ("CCRA") website at www.ccra-adrc.gc.ca, summarizes the reporting requirements under subsection 230(2) of the Regulations. This handbook is referenced as document # 94-110 and can be found in the Miscellaneous Information Returns section in the Other Information Returns window of the website. Under the area entitled Deemed dispositions on pages 22 and 23 of the Handbook, the issue of a transfer of shares to an RRSP is discussed. The Handbook notes that where there is a transfer of securities to an RRSP, "the transfer is not a reportable transaction under Regulation 230".
It should be noted that the transfer of shares from an ESPP to an RRSP trust would constitute a disposition by the transferor, in accordance with paragraph (c) of the definition of "disposition" in subsection 248(1) of the Act.
We trust that the above comments are of assistance.
Yours truly,
Roberta Albert, C.A.
for Director
Financial Industries Division
Income Tax Rulings Directorate
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