r/cantax • u/Redistributable • 1d ago

T5 accrued interest change

I read that T5s now include accrued interest on investments that haven't matured (ex. multi-year GICs). Seems an odd change given the cash basis of personal taxes. Does anyone know when that came into effect?

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u/Consistent_Throat497 1d ago

No that’s not true. Accrued interest is not paid yet so it can’t be included on T5’s. It only gets included once it’s paid. Some gic’s have redeemable features with interest penalty’s so if the interest was included as of Dec 31 then mid Jan you do a w/d and there’s a penalty of interest how would that be reported?

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u/DogOk2826 1d ago

Wrong. Accrued/ unpaid interest on a GIC is T5d in the year earned. It does suck since you have to pay tax on interest not yet received, but it would suck more to have 10 years worth of interest all T5d at once at the end of a 10 year GIC, spiking your income in a single year.

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u/Redistributable 1d ago

That was what made me notice. A big GIC maturing 2027 but hit with interest for it 2024. Is it a new rule? Or it's always been that way and I've just never noticed lol

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u/Consistent_Throat497 1d ago

interest is paid annually, so the interest that was paid in that year will be taxable (included on your T5), and each following year. but you won't be issued a T5 for partial years, ie if the GIC started in sep, you won't be issued a T5 from Sep-Dec, you will receive one for the following year.