Regulation 230

Subsection 230(1)

Sale

Administrative Policy

12 November 2019 External T.I. 2019-0822161E5 F - T5008 Statement of Securities Transactions

a contribution of shares to a TFSA is not a “sale” for Reg. 230 purposes

During the 2019 calendar year, Mr. X withdrew the minimum amount (as defined in subsection 146.3(1)) from his RRIF ($5,000 – so that a T4RIF slip is issued to him for $5,000), and effected the withdrawal through the transfer to his regular brokerage account at a licensed securities dealer of 100 common shares of a public corporation with a fair market value at the time of transfer of $5,000. Immediately thereafter, he transferred those shares to his TFSA, using his "unused TFSA contribution room," thereby resulting in a disposition by him of those shares. The dealer filed a TFSA annual information return identifying Mr. X's TFSA contribution of $5,000.

Is the dealer required to file a T5008 slip (with a book value of $5,000 and proceeds of disposition of $5,000) in respect of Mr. X's transfer of his 100 common shares to his TFSA? CRA responded:

[T]he meaning of "sale" is not exhaustively defined for the purposes of section 230 of the Regulations. …

The transfer by an individual TFSA holder of securities to his or her TFSA as a contribution in a situation as described above is not a sale for the purposes of subsection 230(2) or subsection 230(6) of the Regulations, even if there is a disposition of the securities at their fair market value by the individual because of the application of paragraph 69(1)(b) and paragraph (c) of the definition of "disposition" in subsection 248(1). The trader or dealer in securities is not required to file a T5008 slip for this transaction.

Words and Phrases
sale
Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 230 - Subsection 230(2) transfer of listed shares from taxable brokerage account to individual’s TFSA did not generate T5008 reporting requirement 63

Subsection 230(2)

Administrative Policy

12 November 2019 External T.I. 2019-0822161E5 F - T5008 Statement of Securities Transactions

transfer of listed shares from taxable brokerage account to individual’s TFSA did not generate T5008 reporting requirement

CRA considers that a contribution of shares of a public corporation is not a “sale” of those securities for purposes of Reg. 230. Consequently, there is no obligation of a licensed securities dealer who held shares of a public corporation of an individual in a regular brokerage account to report a transfer of those shares to the individual’s TFSA on a T5008 slip.

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 230 - Subsection 230(1) - Sale a contribution of shares to a TFSA is not a “sale” for Reg. 230 purposes 241

RC4268 Handbook on Securities Transactions, A Summary of the Reporting Requirements Under the Income Tax Regulations

FX

Complete all T5008 slips in Canadian currency. Use the exchange rate that was in effect at the time of the transaction or an average rate that includes the transaction period. ...

Proceeds

Proceeds...means the fair market value, and includes all consideration, such as cash, debt obligations, and shares, that is paid or payable to the transferor.

Isssuers

Issuers of securities can include •partnerships; ...•municipal or public bodies...; and •foreign governments

Reg. 230(5) example

[A] coin dealer who buys gold coins, that are not numismatic coins, from an individual has to report the purchase to the individual on a T5008 slip.

Deemed dispositions

You do not have to report deemed dispositions on a T5008 slip.

Forms

T5008 "Statement of Securities Transactions"

T5008SUM "Return of Securities Transactions"

T4091 "T5008 Guide - Return of Securities Transactions"

Box 19 - Face amount...Leave this box blank if the security does not have a face amount (for example, shares or commodities).

Box 20 - Cost or book value... .The preparer is expected to take reasonable measures in order to ensure that the amount reported in box 20 is correct.

Box 21 - Proceeds... .Do not deduct any expenses from the proceeds

Boxes 22-24 Report in box 21 any part of the proceeds that is credited in money. ...Use boxes [22-24]...to report the transaction only if you cannot reasonably determine the FMV of the securities obtained on conversion. ...[Where you] redeem...a bond for 20 ounces of gold [and]...you could not determine the value of the gold, you would complete boxes 22, 23, and 24 as follows: •Box 22 - MET •Box 23 - 20 OZ •Box 24 - GOLD.

Subsection 230(3)

Administrative Policy

21 February 2017 External T.I. 2016-0676961E5 - T5008

exception for units trading at a fixed price does not apply to USD money market funds

Page 7 of… RC4268) (the “Handbook”) states…:

The purchase (for your own account), sale, redemption, acquisition, or cancellation of units or shares of publicly traded pooled funds, mutual funds and mutual fund corporations qualify as publicly traded securities and have to be reported on a T5008 information return.

Units in a trust that trade at a constant fixed price, such as money market funds, are excluded from this T5008 filing requirement. The income earned from money market funds should be reported on T3 or T5 slips as appropriate.

Does this position apply to units of U.S. dollar denominated money market funds held in a Canadian dollar or U.S. dollar account?

CRA responded:

The position in the Handbook set out above does not apply to units in a U.S. dollar denominated money market fund, regardless of whether the units are held in a Canadian dollar account or a U.S. dollar account. The phrase “constant fixed price” in the Handbook reflects a constant fixed price measured in Canadian dollars.

8 November 2016 External T.I. 2016-0673361E5 - Section 230 of the Regulations

only investment dealer or fund manager generally expected to report MFT fund unit redemptions on T5008s

Where mutual fund securities were held in nominee form by a dealer, are both the dealer and the fund required to issue T5008s under Regs. 230(3) and (6) respectively following redemption of the units (or shares) of a client of the dealer? After indicating that an announcement to the following effect was made at the 29 September 2016 IFIC Conference, CRA stated:

To align industry practices for T5008 slip reporting and filing with the CRA and eliminate the double reporting of dispositions to clients, when investment funds are held in nominee form through an…IIROC…dealer, only the dealer would be required to file the T5008 slips with the CRA and provide a copy of the T5008 slip to the client. When investment funds are held in nominee form through a mutual fund dealer (e.g. … MFDA..or…AMF…), only the fund manager would be required to file T5008 slips with the CRA and provide a copy of the T5008 slip to the client.

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 230 - Subsection 230(6) 230(3) trumped by 230(6) 71

Subsection 230(6)

Administrative Policy

8 November 2016 External T.I. 2016-0673361E5 - Section 230 of the Regulations

230(3) trumped by 230(6)

Where mutual fund units (or shares) are held in nominee form with an IIROC dealer or through a mutual fund dealer, after redemption of the units (or shares) only the dealer or fund manager, as the case may be, and not the mutual fund, is expected to issue T5008 slips to the redeemed investor. As worded, this policy also appears to apply to other “investment funds,” e.g., mortgage investment corps.

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 230 - Subsection 230(3) only investment dealer or fund manager generally expected to report MFT fund unit redemptions on T5008s 161

Navigation