Interac e-transfers | Page 2 | Wealth One Bank of Canada | Discussion forum

Well, it only takes one lawyer or accountant to notice and deal with the issue.

I remember BrimleyChen warning us against this bank when it first opened as s/he seemed to know the backgrounds of some of the players.

Toto, be sure to keep us informed on how this plays out!

I had a GIC mature on Saturday, this morning still sitting there as a GIC. I called at 10:00 am, message said to call back during business hours then hung up, called back and rep told me her computer's frozen so she'll have to call me back. I said don't bother, just put the funds in my savings account as my maturity instructions had indicated. We'll see.

Update. Rep called back, it's in my savings accounts (I confirmed it), so all resolved within half an hour, I like Wealth One again, we're buds once more.

If Wealth One is saying this is not interest income, is just a promo gift, and they are not reporting it to CRA as interest income of recipients then who's to say otherwise? Plus CRA won't even know about it. I wouldn't report it, as advised by Wealth One more than once to toto.

I also do kind of view it as Norman1, i.e. as getting a $100K GIC for $99K, after promo discount/rebate, so triggering a capital gain when it matures. But, again, CRA would never know about it.

Norman1, why do you say it doesn't meet criteria 3 of "gift"?:
"The donee confers no right, privilege, material benefit, or advantage on the donor or on a person designated by the donor." What right, etc has toto conferred on Wealth One?

I don't agree that whenever someone buys a GIC that that's viewed as a benefit to the fi in CRA's eyes. The GIC issuer is paying going rate interest and has an outstanding liability to offset the cash received, no net gain, just raising cash, just added equally to assets and liabilities on balance sheet. But I do agree that there's a capital gain to report by GIC holder at time of maturity.

When Wealth One records a marketing, etc expense there is no detailed reporting to CRA as there is in the case of T5s, etc. CRA would not know in detail what comprises Wealth One's deducted expenses so would not know about these rebates, unless Wealth One recorded these rebates/discounts as a separate identifiable expense item instead of buried in marketing, etc, and even then CRA would have no information who these amounts were paid out to. Unless CRA conducted an audit of Wealth One, as far as I can tell.

Norman1, even though in this transaction I disagree with your reading of the 3rd condition in the ITA section you cited (some jurisprudence or other authority re the meaning of "material benefit" as intended by that specific section could change my mind) we still end up at the same place. That is, no income tax for the recipient of the rebate at time of receipt but capital gain to be reported at time of GIC maturity.

And I'm pretty comfortable CRA wouldn't pick up on this unless it became widespread practice for a few decades.

I do understand your opinion, Norman1, just saying I don't necessarily share it. For example, letting someone use $300,000 is, to me, not necessarily a material benefit when there are more requirements, i.e. that person has to pay you (maybe even handsomely) interest & then also pay you back by a certain date. Your wider interpretation of "material benefit" (especially as it's in an ITA provision dealing specifically with gifts) means that phrase would apply to pretty much every single transaction arm's length parties freely enter into, plus the benefit would exist for both parties, not just to one, so the argument that the phrase, instead of applying so generally so as to almost render it of little use, has a more specific meaning in this case is one that could be argued. Not saying it would prevail, just my opinion. You obviously know more about jurisprudence, and the concept of presuming bargains instead of gifts is informative to me.

I am coming around, however, to the view in your last two paragraphs. The cashback is only available if you buy the GIC, thus it contravenes the general principle that a "gift" is given freely with no strings attached, not connected to another required action.

Thanks, toto, for updating us. It wasn't wasted time for me to explore the subject.

Interesting: For tax purposes, the cashback was treated as bonus interest, paid in advance. Usually, interest is paid in arrears and not in advance.

Thanks for discussing this issue. I kept the promo money in wealth one account for the year, so the t5 had the promo money and small amount of interest included.
When I bought the gics and got the promo, I had factored in tax on the 3000.00 at that time, that's the reason I called them to ask about it. I wasn't going to get a t5 drop from wealth one on the gics until next year, but wanted to know about promo tax slip.
I make quarterly tax installments so like to keep track.
I was really surprised when they said it wasn't taxable because I also bought Accelerate gic with 100 dollar promo and it's taxable.
I still don't reget buying wealth one gics, I got a great rate and cash back was immediately put in my account with no fussing around.
Other than this mix up in tax forms, wealth one was very good, nice certificates too, just like Oaken. Plus I think I mentioned this before , wealth one electronic transfers are lightning fast. I pulled money into wealth one in the afternoon and it was there next morning first thing.