How are foreign spin-offs reported on the T5?
For Canadian tax purposes, the fair market value of foreign spin-off shares received by a Canadian resident in a non-registered account is considered to be a taxable foreign dividend and must be reported to the Canada Revenue Agency on a T5 (and Relevé 3, if you are a resident of Quebec). Legislation allows you to use an alternative tax treatment on approved foreign spin-offs if certain criteria and time limits are met and a joint tax election is filed with the CRA after being completed by you and the parent company that completed the spin-off. Even though you may make an election, RBC Dominion Securities is still required to report the full fair market value of the spin-off on your T5 tax slip.
