Principal Issues: Does the CRA still consider the settlement date to be the date of disposition of shares for income tax purposes?
Position: Yes
Reasons: A disposition does not take place until the vendor is entitled to the proceeds of disposition (on the settlement date).
2012 TEI Conference
Question 5
In recently cancelled IT-133 Stock Exchange Transactions Date of Disposition of Shares (November 30, 1973), CRA said that the sale of shares for tax purposes occurs on the "settlement date" as determined by the rules of a stock exchange where the trade takes place. Typically, the "settlement date" on a disposition of shares is two to three days subsequent to the trade date. We invite CRA to confirm that, notwithstanding cancellation of the IT, it considers the settlement date to be the date of disposition of shares for tax purposes.
Answer 5
We confirm that, notwithstanding the cancellation of IT-133 Stock Exchange Transactions Date of Disposition of Shares, the CRA considers the settlement date to be the date of disposition of shares for income tax purposes.
Andrea Boyle
May 6, 2012
2012-046893