T5 tax package – Outstanding tax documents

• We issue several tax slips and supporting documents to assist you in preparing your tax return. It is important to ensure that you have all of your slips before you file your tax return. Please review the two handy checklists within the cover letter of your T5 tax package: “Outstanding tax documents you may receive from our firm” and “Outstanding tax documents you may receive from third parties.”

Multiple account holders/Estates

• Joint accounts: Although tax slips for joint accounts are issued in the name of two (or more) individuals, Canada Revenue Agency (CRA) only requires one Social Insurance Number (SIN) be included on the tax slip. Therefore, only the primary account holder’s SIN will be displayed on your tax slip.
• Estate accounts: According to CRA, there is no requirement to produce a T5 slip to show income earned before and after the date of death. It is the responsibility of the beneficial owners or the estate’s executor to report the appropriate share of income in the tax return of the deceased individual.

 

Residency changes

• If you have moved to or from a different country within the tax year, it is up to you to claim back any tax withheld, as CRA does not refund the funds to RBC once they have been paid. In addition, CRA does not accept amendments to or cancellations of NR4s once they have been issued.

Non-resident tax on Canadian income trust units and split-share corporations

• The taxable breakdown for income trust units and split-share corporations is not available until after the calendar year is complete. Therefore, non-resident accounts are not charged non-resident tax when distributions are made during the year but, rather a one-time charge for the full year is generated once the taxable nature of the trust’s distributions is determined. Any applicable charges will be processed in April and reflected in your statements.

Return of capital

• Return of capital adjustments will be processed in your accounts for income trusts, limited partnership units and split-share corporations in April and will be reflected in your statements.
• Note: Return of capital adjustments need to be factored into determining your adjusted cost base and calculating any gains/losses.

 

Foreign spin-offs

• For Canadian tax purposes, the fair market value of foreign spin-off shares received by a Canadian resident in a non-registered account is considered to be a taxable foreign dividend and must be reported to CRA on your tax return.
• Legislation allows you to use an alternative tax treatment for eligible foreign spin-offs if certain criteria and time limits are met and an election is filed with your tax return. Royal Trust is still required to report the full fair market value of the spin-off on the T5 slip.
• The book value shown on your statement for a foreign spin-off share will be the taxable foreign dividend amount. The book value of the parent company shares will remain unchanged.

 

Dates for T3/RL-16 and T5013/RL-15 tax packages

• Delivery of T3/RL-16 and T5013/RL-15 packages depends on when information is provided to us by external issuers. The CRA reporting deadlines for issuers to provide their tax information to financial intermediaries (such as Royal Trust) for tax receipt preparation is March 31. Some external issuers, such as mutual fund companies, mail tax slips directly to you.
• Note: You may receive tax packages in April due to late disclosures and amendments by some income trusts and limited partnership units. Please do not file your tax return before receiving all required slips.

 

Registered Retirement Savings Plan (RRSP) contribution receipts

• RRSP contribution receipts are delivered online or by mail throughout the tax season to capture all contributions.
   

Tax-Free Savings Account (TFSA)

• In any calendar year, your total TFSA contributions cannot exceed your contribution room. If you withdrew funds from your TFSA last year, that amount will be added to your contribution room for this year.

 

First Home Savings Account (FHSA)

• A T4FHSA / RL-32 tax slip will be issued based on various transactions – qualifying or taxable withdrawals, beneficiary distributions received, amounts deemed received on cessation, transfer activities, designated withdrawals, contributions. There is a lifetime limit contribution limit of $40,000, with an annual contribution limit of $8,000.

Foreign currency tax slips

• If you receive a tax slip in a foreign currency, you will need to convert the amounts to Canadian dollars.