The new partner ACB and ARA reporting requirement in the new T5013 returns were announced with short notice, which caught many partnerships off guard.
A new page on the CRA website, "Clarifications and Modifications on the Partnership Information Return (T5013)", provides guidance on the following topics:
- Filing Schedule 50, "Partnership Ownership and Account Activity"
- Meaning of "nominee or agent" for the Partnership Information Return
- Reporting affiliated partnerships on Schedule 9
- Due dates and penalties
- International Financial Reporting Standards (IFRS)
- Filing requirements for nominee or agents.
At a recent meeting with taxpayers and other stakeholders (including KPMG), the CRA verbally announced that it would extend its administrative position regarding the transition to the new filing requirements for all partnerships with information returns due in 2012 (as opposed to extending the administrative position for all 2012 fiscal periods which it has now agreed to do). This administrative position was originally announced only for partnerships' 2011 fiscal period.
ACB reporting - Schedule 50
The CRA states on its site that, to ease concerns about providing updated ACB and ARA information, it will accept T5013 returns filed by the due date if they include the 2009 revision (used for the tax year 2010) or the 2011 version (used for tax year 2011) of Schedule 50 with complete information on partner identification and the annual transactions between partners and the partnerships. Further, the CRA will not impose penalties on T5013 returns for 2011 or 2012 fiscal periods as a result of incomplete ACB and ARA information on Schedule 50.
Due dates and penalties
The CRA advises that it has modified portions of the T5013 Guide discussing due dates and penalties. For example, the CRA notes that the due date for filing a T5013 return depends on the type of partners, including end members of a partnership. As a result, the T5013 now asks whether the partner members, including "end members", are individuals (includes individuals, trusts, and professional corporations), corporations, or a mix of individuals and corporations. End members are defined in the T5013 guide as "the last individual (including a trust) or corporation that receives the final allocation from a partnership after the income has been allocated through all the various levels of the tiered partnerships".
Meaning of "nominee or agent"
Every person who holds an interest in a partnership as a nominee or agent for another person has to complete and file a separate return for each composite T5103 information slip received from each partnership in which an interest is held for another person.
The CRA notes that "nominee" and "agent" are not defined in the Income Tax Act or the Regulations. For the purposes of filing the T5013 return, the CRA says that the nominee or agent has to hold an interest in the partnership for another person and, for these filing purposes only, cannot use the usual "authorized representative" designation.
For more information, contact your KPMG adviser.