Tax shelter identification number
Tax shelter identification number
You may be looking for: Completing Form T5001
The promoter of a tax shelter has to get a tax shelter identification number before selling, issuing, or accepting a contribution towards acquiring an interest in a tax shelter (including gifting arrangements). The tax shelter identification number consists of two alphabetic characters (TS) followed by six numeric characters.
The tax shelter identification number does not in any way confirm the entitlement of an investor to claim any tax benefits associated with the tax shelter.
The Canada Revenue Agency (CRA) uses the tax shelter identification number for administrative purposes, such as identifying tax shelters for audit. Under the Income Tax Act, the CRA can get or verify information about any tax shelter that applies for an identification number, even if no taxpayer has filed an income tax return claiming a loss or deduction, or a gift or monetary contribution tax credit, related to the tax shelter.
- Applying for a tax shelter identification number
- Providing a tax shelter identification number
- Identifying tax shelter participants
Applying for a tax shelter identification number
The tax shelter promoter must use Form T5001, Application for Tax Shelter Identification Number and Undertaking to Keep Books and Records, to apply for a tax shelter identification number.
Before the Canada Revenue Agency will issue a tax shelter identification number, the promoter has to provide the CRA with prescribed information including a copy of an offering memorandum, and with a statement that the promoter will keep the books and records in Canada.
For more information, go to Completing Form T5001.
Providing a tax shelter identification number
Under paragraph 237.1(5)(a), promoters of a tax shelter have to make reasonable efforts to ensure that the identification number assigned to a tax shelter is provided to every person who acquires an interest in the tax shelter:
- In the case of a sale or issuance of an interest by any promoter of a tax shelter, the promoter has to provide the identification number to the purchaser directly.
- For subsequent sales of interests in the tax shelter for which the promoter is not directly involved, the promoter’s duty will normally be satisfied by clearly including the identification number on each certificate of ownership.
Under paragraph 237.1(5)(c), every promoter of a tax shelter has to include on every written statement that refers to the identification number of the tax shelter the following statement:
"The identification number issued for this tax shelter shall be included in any income tax return filed by the investor. Issuance of the identification number is for administrative purposes only and does not in any way confirm the entitlement of an investor to claim any tax benefits associated with the tax shelter."
Statement of earnings
Under paragraph 237.1(5)(b), each promoter who prepares a statement of earnings for a tax shelter shall prominently display the tax shelter identification number on the upper right-hand corner of the statement. If an identification number is not obtained in advance, no person may claim any deduction for the tax shelter until the number is obtained, and the promoter pays the penalty. Tax shelter investors have to provide the tax shelter identification number on their claim for tax benefits for any investment in a tax shelter.
The Canada Revenue Agency will deny tax benefits claimed by tax shelter investors if they participate in a tax shelter arrangement that does not have a tax shelter identification number.
Identifying tax shelter participants
Any person who organizes or sells an interest in any tax shelter also has to keep a list showing the name, address, and identification number of each participant.
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