Get ready for tax season 

Statement of Investment Income

The T5 / RL-3 reports all dividend and interest income paid into your non-registered investment accounts. The amounts in the T5 / RL-3 slip boxes represent the totals for all your accounts indicated on the Investment Income Summary. Please note that the slip is not issued if the total investment income included in the summary is less than $50. However, you are required to include that income in your tax return.

Foreign income

Dividend or interest income from foreign sources is shown in box 15 of T5 (box F of RL-3) and the tax paid to the foreign country for that income is reported in box 16 of T5 (box G of RL-3).

Accrued interest

Interest accrued during the year on discount debt instruments (e.g., strip coupons, residual bonds) and compound interest debt instruments (e.g., GICs) must be declared on an annual basis, even though no actual interest has been paid. The annual accrued interest on those instruments is included in your T5 / RL-3, except for interest accrued on strip coupons and residual bonds, which is reported in a separate statement. Only holders of that type of investment will receive the relevant statement in the coming weeks.

Securities transferred to a registered account

If savings bonds or other debt obligations types of bonds are transferred with their accrued interest to a Registered Retirement Savings Plan (RRSP), Registered Retirement Income Fund (RRIF), Tax-Free Savings Account (TFSA) or Registered Education Savings Plan (RESP), they will be included in the T5 / RL-3 and will also appear on your Investment Income Summary.

This summary recaps all investment income reported in your non-registered accounts during the period (in chronological order).

It also contains information on the interest you paid during the year, such as interest on margin account debit balances or accrued interest paid when buying bonds. Accrued interest paid must not be deducted from other interest received, but rather should be added to other financial expenses if they are deductible. Note that any annual administration fees for an RRSP, RRIF, TFSA, RESP, LIRA, LIF or RDS paid outside those registered accounts are not deductible.

Statement of Securities Transactions

If you disposed of securities in your non-registered account during the previous year, you will receive a T5008 / RL-18. Proceeds of dispositions are carried forward separately from any fees and commission paid, as required by tax authorities.

Please note that the moment you realize a gain or loss from a sale, you may be required to make certain adjustments to the book cost or value of your securities in order to determine the adjusted cost base (or tax cost). You can consult your portfolio statements and/or trade confirmations to obtain this information.

This summary recaps purchases, redemptions and dispositions of securities in your non-registered account during the period.  

Contrary to the T5008 / Relevé 18, transaction amounts indicated in this summary include fees and commissions you have paid. 

Statement of Trust Income Allocations and Designations and Summary of Trust Income

If you have trust units, you will receive tax information on a T3 / RL-16 (excluding mutual funds*). This slip will be sent to you with a Summary of Trust Income detailing the information on the slip. 

* If you have units of a mutual fund trust, the company that manages the funds will send you the T3 / RL-16 directly. Note that some mutual funds can be structured as corporations. In that case, each company will send you the tax information on a T5 / RL-3. 

Statement of Partnership Income

If you hold an interest in a limited partnership (or general partnership), you will receive your tax information on a T5013 / RL-15.

Please note that mutual fund trusts (T3 / RL-16) and limited partnerships (T5013 / RL-15) have until March 31 of the year following their distribution to send you the tax information. You could receive these slips in separate mailings depending on when the information is published by third parties.

You may receive a Pending Income Trust Summary Report with the first T3 / RL-16 slips sent to you. This summary will list trusts for which issuers have not yet posted the tax information needed to produce tax slips, which will therefore be sent later. 

RRSP or RRIF withdrawal

If you made a withdrawal from your RRSP or RRIF during the previous year, you will receive a T4RSP or T4RIF, as applicable, and an RL-2 indicating the amount withdrawn and the tax withheld.

RDSP payment or RESP withdrawal

If a payment is made from an RDSP (Registered Disability Savings Account) or if income or grants are withdrawn from an RESP, a T4A / RL-1 will be issued in the plan beneficiary’s name. The capital withdrawn from an RESP is not subject to tax. 

If you did not claim a 2021 tax deduction for your RRSP contributions made during the first 60 days of 2022, you can claim the deduction for the 2022 tax year. Similarly, any RRSP contributions made during the first 60 days of 2023 may be deducted for either the 2022 or 2023 tax year. To allow you to claim a deduction for the year of your choice, receipts for your contributions made during the first 60 days of the year will be sent at the end of January and then every week in February. Receipts for contributions made during the remaining 10 months are issued in January of the following year.

The principal of RRBs is indexed every day based on the Consumer Price Index, which makes them "indexed debt obligations" for purposes of the Income Tax Act. As such, they are covered by special rules determining their accrued return on the indexation of the principal. Only the payment of the coupon is included in the T5 and Relevé 3, which does not reflect the capital indexation.

Taxation during the holding period

If you hold a real return bond in a non-registered account, you will be taxed on any semi-annual interest that is paid out to you and included in the T5 and Relevé 3. 

In addition, for each 6-month period ending at an interest payment date, you are required to determine the accumulated inflation compensation for the past six months. You must include in your income, the inflation compensation accumulated during each interest payment period ending in the taxation year. The amount to be included in income will be deemed to be interest received. 

Similarly, during a period of deflation, the inflation compensation will be negative, and any loss of principal may be deducted from income of the year during which it occurred. The amount of the loss will be deemed to be interest paid on money borrowed to earn income from business or property and will be deductible as such on your income tax return. 

The following table gives you the index factor for each interest payment period.

Example if you hold a RRB Quebec 4.25% maturing Dec. 1, 2031

Disposition of the RRB

On the disposition of an RRB, you will realize a capital gain (or capital loss) to the extent that the proceeds of disposition (net of any costs of disposition) exceed (or are exceeded by) the adjusted cost base of the RRB. 

If you have disposed of an RRB during the year, the inflation compensation that has accumulated between the last interest payment date and the date of disposal, as well as any accrued income relating to interest coupons, will have to be included in income (and deducted in the event of deflation) for the taxation year in which the disposal occurs. 

Your Wealth Advisor can provide you with the index ratio at the date of disposal.

Amounts added to and deducted from the adjusted cost base

Whenever an amount is added to income as interest income on the increase of the capital, an equal amount must be added to the RRB's adjusted cost base (ACB). The same goes for amounts deducted as interest on the decrease in value of the capital, which must be deducted from an RRB's ACB.

Statement of Amounts Paid or Credited to Non-Residents of Canada

Non-residents of Canada will receive an NR4 stating the gross investment income and tax withheld (if applicable) as well as withdrawals from registered accounts.