Registering a tax shelter
Who has to register?
Under subsection 237.1(2), promoters of tax shelters have to use Form T5001, Application for Tax Shelter Identification Number and Undertaking to Keep Books and Records, to register a tax shelter with, and to apply for a tax shelter identification number from, the Canada Revenue Agency (CRA).
A promoter will have to apply for a new tax shelter identification number where the previous number is no longer valid. Under subsection 237.1(3), the CRA will issue a tax shelter identification number when they receive an application, if the application includes:
- all the prescribed information
- a satisfactory undertaking for the custody of the tax shelter's books and records. The CRA will usually accept an undertaking by the promoter responsible for the tax shelter's books and records to keep such documents at the promoter's usual place of business in Canada
When should the promoter register?
Under subsection 237.1(4), promoters must have a tax shelter identification number before selling, issuing, or accepting a contribution towards acquiring an interest in the tax shelter (including gifting arrangements). Preliminary promotions are not affected, as long as no actual sales are concluded or contributions received before the CRA issues the identification number.
In addition, for applications made on or after March 29, 2012, the promoter may sell, issue, or accept consideration in respect of the tax shelter only for the calendar year designated by the Minister as being applicable to the identification number. Tax shelter identification numbers that were applied for before March 29, 2012 (or that had been issued as of that date) will be valid only until the end of 2013. As such, a promoter will need to obtain a new identification number for a tax shelter before selling, issuing or accepting consideration in respect of that tax shelter if the previous number is no longer valid.
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