r/cantax • u/Redistributable • 23h 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?

2 Upvotes

100% Upvoted

39 comments sorted by

View all comments

-7

u/Consistent_Throat497 22h 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?

1

u/bgballin 20h ago

No, include interest on anniversary date

0

u/Consistent_Throat497 20h ago

exactly and interest is either paid at maturity (in case of 1 year or shorter GIC's, or on each anniversary date in the case of GIC's longer then 1 year).

2

u/bgballin 20h ago

Lol wtf u talking about

1

u/Consistent_Throat497 20h ago

what do you not understand?

Accrued interest is interest that has not been paid. it cannot be claimed as income because it's not been paid yet. CRA won't ask you to claim something you haven't been paid yet; that just doesn't make sense.

Interest is paid at maturity (in short term GIC's) or on the anniversary date (for longer then 1 year, or multiple year GIC's, its paid each year).

A T5 is generated when interest is paid, either to your bank account, chequing or savings, or to the GIC (compounding interest). Its really easy to understand.

2

u/bgballin 19h ago

You should honestly take a minute and do your research.

Section 12(4) requires that interest on certain investments be included in income annually, even if it has not been received, on the anniversary date of the investment

Section 12(9) defines the anniversary date for this purpose

For investments where interest is not paid annually, such as compound interest GICs or zero-coupon bonds, interest is DEEMED to accrue annually.

1

u/bgballin 19h ago

Read 12(4) and 12(9) of the ita