When do you have to prepare a T5 slip

If you make certain types of payments to a resident of Canada, or if you receive certain types of payments as a nominee or agent for a person resident in Canada, you have to prepare a T5 slip.

These payments include:

• eligible dividends and dividends other than eligible dividends (including most deemed dividends)
• interest from one or more of the following:
  • a fully registered bond or debenture
  • money loaned to or on deposit with, or property of any kind placed with, a corporation, association, organization, institution, partnership, or trust
  • an account with an investment dealer or broker
  • an insurance policy or annuity contract (when the interest is paid by an insurer)
  • an amount owing as compensation for expropriated property
• certain amounts distributed from an eligible funeral arrangement (see Box 14 – Other income from Canadian sources)
• amounts that have to be included in a policyholder's income under section 12.2 of the Income Tax Act
• royalties from the use of a work, an invention, or a right to take natural resources
• blended payments of income and capital made by a corporation, association, organization, institution, partnership, or trust. For more information, see Blended payments
• interest that is deemed to accrue pursuant to subsection 20(14.2) of the Income Tax Act as a result of the assignment or transfer of linked
  notes (see Box 30 – Equity linked notes interest) 

For investment contracts acquired before 1990, you have to report accrued interest every three years, unless the recipient has elected to report annually. This calculation is based on the calendar year. For more information, see Contracts acquired after November 12, 1981, and before 1990.

For investment contracts acquired after 1989, you have to report accrued interest every year. Base this calculation on the date the investment contract was issued. We will consider an investment contract acquired before 1990 to be a new contract acquired after 1989 if certain material changes were made after 1989. For more information, see Interpretation Bulletin IT448 (Archived), Dispositions – Changes in terms of securities.

We explain special accrual rules for indexed debt obligations in Indexed debt obligations issued after October 16, 1991.

You do not have to prepare a T5 slip to report:

• amounts paid to one recipient when the total amount for the year is less than $50
• the interest part of a Blended payment made by an individual
• interest one individual pays to another, such as interest paid on a private mortgage (this does not include investment dealers or brokers making payments for client program accounts)
• interest paid on loans from banks, financial houses, or other institutions whose usual business includes lending money
• capital dividends, as described in Income Tax Folio S3–F2-C1, Capital Dividends
• amounts paid or credited to non-residents of Canada, as described in Payments to non-residents of Canada
• interest on an investment contract accrued or payable during the year to a corporation, partnership, unit trust, or any trust of which a corporation or partnership is a beneficiary
• an amount distributed from an eligible funeral arrangement, if the amount is a return of contributions only
• interest paid to farmers under the AgriStability and AgriInvest programs, Fund 2 (these amounts are reported on an AGR-1 slip)

Forms and publications

• Guide T4015, T5 Guide - Return of Investment Income
• Form T5, Statement of Investment Income
• Archived Interpretation Bulletin IT448, Dispositions – Changes in terms of securities
• Income Tax Folio S3-F2-C1, Capital Dividends

Related Topics

• Payments to non-residents of Canada