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.
Dear Sirs:
Re: Reporting on the Acquisition & Disposition of Securities
We are replying to your letter of July 19, 1991 concerning the obligations imposed by Regulation 230 of the Income Tax Act on traders, dealers, agents and nominees who buy or sell securities on behalf of others. In our telephone conversation (Humenuk XXX of August 21, 1991, you clarified your questions as follows:
You note that Regulation 230(7)(d) does not require information slip T5008 to be prepared in respect of the sale of a security on behalf of a person who is exempt from tax under Part I of the Income Tax Act (the Act). You ask whether it was an oversight that the sale of securities on behalf of trusts such as Health and Welfare Trusts, Stock Purchase Plans, Savings Plans and Foreign Insurance Trusts which are subject to tax under Part I of the Act, were not also exempted from the Regulation.
Regulation 230 is intended to provide Revenue Canada with information concerning security transactions which are required to be reported on income tax returns filed under Part I of the Act. It is not an oversight, therefore, that information slips are required in respect of transactions in securities on behalf of trusts which are subject to tax under Part I of the Act.
Your second question concerns the particular requirements imposed on XXX by this Regulation. You ask whether XXX would be exempt from this Regulation when acting in the capacity of trustee rather than in the capacity of agent.
It is a question of fact whether XXX is acting in the capacity of trustee, agent, nominee, or a combination thereof in any particular situation and therefore, we cannot provide you with any meaningful comments on your specific situation without a complete review of all the relevant documentation.
Normally, we expect that the T5008 issued by the broker would be sufficient to identify the beneficial owner of the security. Where this is not the case, (i.e., where the security is registered in the name of a nominee or agent) it would be reasonable to expect a T5008 to be issued by the nominee or agent to whom the security is registered. Where the security is registered in the name of the trust, it is our view that a T5008 would not be required by the trustee since the trustee is responsible for filing the trust return.
We trust our comments will be of assistance to you.
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© Her Majesty the Queen in Right of Canada, 1991
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© Sa Majesté la Reine du Chef du Canada, 1991
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