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Client Guide to 2018 Tax Reporting

To help make tax season easier for you, 2018 tax documents will now be available electronically via DS Online. To enrol, please contact your Investment Advisor. Please note that some tax documents, such as those issued by a third party (including RBC Mutual Funds), will be mailed directly to you and will not be available online.

Important Dates

March 1, 2019 – Last day for 2018 RRSP contributions.

April 30, 2019 – Last day to file your 2018 tax return without penalty.

June 17, 2019 – Last day to file your 2018 tax return without penalty if you are self-employed.

Additional Tax Information

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 filing your tax return. Please review the checklist of your investments held in your nonregistered accounts in the “Cover Letter” of your T5 tax package under section “Outstanding Tax Documents you MAY receive from our Firm or Third Parties” to help keep track of your slips.

Joint accounts: Although tax slips for joint accounts are issued in the name of two (or more) individuals, the 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 number 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 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.

If you have moved in or out of 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 paid. In addition, CRA does not accept amendments or cancellations of NR4s once they have been issued.

Due to the nature of these securities, the taxable breakdown is not available until after the calendar year is complete. Therefore, nonresident 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 2019 and reflected in your statements.

Return of capital adjustments will be processed in your accounts for income trusts, limited partnership units and split corps in April 2019 and will be reflected in your statements.

NOTE: Return of capital adjustments need to be factored into calculating any gains/losses.

For Canadian tax purposes, the fair market value of foreign spinoff shares received by a Canadian resident in a non-registered account is considered to be a taxable foreign dividend and must be reported to the CRA on a T5 slip.

Legislation allows you to use an alternative tax treatment for approved foreign spin-offs if certain criteria and time limits are met and a joint tax election is filed with the CRA after being completed by you and the parent company that completed the spin-off. Even though you may make an election, RBC Dominion Securities 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.

Delivery of T3/R16 and T5013/R15 packages depends on when information is provided to us by external issuers. CRA reporting deadlines for issuers to provide their tax information to financial intermediaries (such as RBC Dominion Securities) 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.

RRSP contribution receipts have a variety of mailings to capture all contributions made in 2018 (less contributions made in the first 60 days of 2018) as well as contributions made during the first 60 days of 2019.

In any calendar year, your total TFSA contributions cannot exceed your contribution room. If you withdrew funds from your TFSA in 2018, that amount will be added to your contribution room for 2019.

Please be advised that there are significant punitive tax liabilities for holding a Non-Qualified Investment (NQI) in your registered plan. A letter detailing NQI assets and the corresponding values will be mailed to you in February 2019 to help you file with CRA. Depending on your situation, you may wish to consider taking action on any NQIs in your registered plan to minimize potential tax penalties. Please consult with a qualified tax advisor prior to taking action.

If you receive a tax slip in a foreign currency, you will need to convert the amounts to Canadian dollars. The attached table shows the average annual exchange rates for various currencies that can be used for your reference.

Average exchange rates (per Bank of Canada)

  2014 2015 2016 2017 2018
U.S. Dollar 1.1045 1.2787 1.3248 1.2986 1.2957
British Pound 1.8190 1.9540 1.7962 1.6720 1.7299
Japanese Yen 0.0105 0.0106 0.0122 0.0116 0.0117
Swiss Franc 1.2078 1.3286 1.3450 1.3189 1.3246
Australian Dollar 0.9963 0.9604 0.9852 0.9951 0.9687
Hong Kong Dollar 0.1424 0.1649 0.1707 0.1667 0.1653
Euro 1.4671 1.4182 1.4660 1.4650 1.5302

All amounts are expressed in the number of Canadian dollars it would cost on average for the year to purchase one unit of the foreign currency.

Mailing Dates

 

RRSP Contribution Receipt

Approximate Mailing Date: Late January, early February and daily thereafter

Approximate Online Availability: Late January, early February and daily thereafter

Issued to report the value of cash or securities (in-kind contributions) contributed to Registered Retirement Savings Plan (RRSP) accounts.

For last 10 months of 2018, the receipts will be issued in late January.

For first 60 days of 2019, the receipts will be issued in early February and daily thereafter.

 

RRIF/LIF/LRIF/RLIF/PRIF Evaluation Letter

Approximate Mailing Date: Late January

Approximate Online Availability: Not available

Details (i) the value of your assets at December 31, 2018; (ii) the minimum amount that must be withdrawn; (iii) the maximum amount that can be withdrawn if you have a Life Income Fund (LIF), Locked-in Retirement Income Fund (LRIF), Registered Retirement Income Fund (RRIF), Prescribed Retirement Income Fund (PRIF) and/or a Restricted Life Income Fund (RLIF); and (iv) your desired payment amounts and frequency.

 

T4RSP/R2/NR4
(RRSP withdrawals)

Approximate Mailing Date: Late February

Approximate Online Availability: Late February

Issued to report withdrawals from RRSP accounts. All payments from RRSP accounts must be included in your income. Relevé 2 for Quebec residents/NR4 for nonresidents are issued.

 

T4RIF/R2/NR4
(RRIF withdrawals)

Approximate Mailing Date: Late February

Approximate Online Availability: Late February

Issued to report withdrawals from a RRIF, LIF, LRIF, RLIF, or PRIF accounts. All payments from above plans must be included in your income. Relevé 2 for Quebec residents/NR4 for non-residents are issued.

 

T4A/R1/NR4
(RESP withdrawals)

Approximate Mailing Date: Late February

Approximate Online Availability: Late February

Issued to report receipt of Educational Assistance Payments by the beneficiaries of a Registered Education Savings Plan (RESP) during 2018 calendar year, accumulated Income Payments to the Subscriber during 2018 calendar year or other sources. Relevé 1 for Quebec residents/NR4 for non-residents are issued.

 
 

T5/R3

Approximate Mailing Date: Late February

Approximate Online Availability: Late February

Issued to Canadian residents to report income of $50 or more from stocks, bonds or interest on credit balances during the calendar year. Relevé 3 slip is issued to the Quebec residents corresponding to T5 slip.

 

NR4

Approximate Mailing Date: Late February

Approximate Online Availability: Late February

Issued to non-residents of Canada who received Canadian investment income. Both the gross amount of the income received and any Canadian non-resident taxes withheld are reported.

 

Summary of investment income and expenses

Approximate Mailing Date: Late February

Approximate Online Availability: Late February

Summarizes income received as well as charges to your account for dividends owed, interest paid on debit balances and accrued interest paid on the purchase of bonds. The amount in the “Paid to You” column supports the figures reported on the T5. The amount in the “Paid by You” column may qualify as an investment expense on your tax return.

 

Summary of security dispositions

Approximate Mailing Date: Late February

Approximate Online Availability: Late February

Summarizes the proceeds of any sale or maturity that took place through your account during the year. This report, together with your trade confirmations or month-end statements, will assist you in calculating your capital gains/losses.

 

Foreign securities report

Approximate Mailing Date: Late February

Approximate Online Availability: Late February

Lists any foreign assets to support your T1135 filing requirements with CRA. It has been formatted to provide the information required in Form T1135 Section 7 “Property held in an account with a Canadian registered securities dealer or a Canadian Trust company.” All amounts are reported in Canadian dollars.

NOTE: This report is issued only to residents of Canada. If there is a residency change during the year, the report will include information only for the period when you were a resident of Canada.

 

T5/R3
(additional investment income)

Approximate Mailing Date: Late February

Approximate Online Availability: Late February

Issued to report income allocations from split share corporations. Relevé 3 slip is issued to the Quebec residents corresponding to T5 slip.

 

T3/R16
(trust income)

Approximate Mailing Date: Throughout March

Approximate Online Availability: Throughout March

Issued to report income on investments held in Canadian-based Real Estate Investment Trusts (REITS), income trusts, ETFs and capital trusts. Relevé 16 slip is issued to the Quebec residents corresponding to T3 slip.

 

T5013/R15
(limited partnership income)

Approximate Mailing Date: Throughout March

Approximate Online Availability: Throughout March

Issued to report the allocation of limited partnership’s income among the Canadian resident partners. Relevé 15 slip is issued to Quebec residents corresponding to T5013 slip. SK-METC (The Saskatchewan Mineral Exploration Tax Credit) slip is issued to Saskatchewan taxpayers who invest in eligible flow through shares issued by mining or exploration companies.

 

T3/R16 and T5/R3
(mutual funds)

Approximate Mailing Date: Not applicable

Approximate Online Availability: Not available

Directly issued and mailed by respective mutual fund management companies.

 
 

1042-S
(Non-U.S. beneficial owners of flowthrough entities)

Approximate Mailing Date: Late March

Approximate Online Availability: Not available

Issued to non-U.S. persons that are beneficial owners of flow-through entities with reportable U.S.-source income. These slips are filed with the Internal Revenue Service (IRS).

 

1099 official package
(for QI/U.S. persons)

Approximate Mailing Date: Late February

Approximate Online Availability: Not available

Issued to U.S. and suspected U.S. persons with income that is required to be filed with the Internal Revenue Service (IRS).

1099-DIV: Reportable dividends paid to U.S. persons subject to U.S. tax laws.

1099-INT: Reportable Interest paid to U.S. persons subject to U.S. tax laws.

1099-B: Reportable proceeds from sales or redemptions of securities, issued to U.S. residents.

1099-MISC “Miscellaneous Income”: Reportable income not included in any of the above forms (such as U.S. royalty income).

Effectively connected income from U.S. limited partnerships: Reportable distributions will be provided on the 1042-S slip, which is mailed separately from the 1099 package.

 

1099 unofficial package
(for QI/U.S. persons)

Approximate Mailing Date: Late February

Approximate Online Availability: Not available

Issued to U.S. and suspected U.S. persons who do not receive “official” 1099 packages.

Information in the “Unofficial” 1099 package is not filed with the IRS and these unofficial forms should not be attached to a tax return.

Effectively connected income from U.S. limited partnerships: Reportable distributions will be provided on the 1042-S slip, which is mailed separately from the 1099 package.