Guide to Taxes on Your First Trading Account

If you recently opened your first trading account in Canada, you might be surprised to learn that, come tax time, you could receive a bunch of tax slips you've likely never seen before. They may come in the mail or just appear in your Canada Revenue Agency (CRA) account. What are they, and what should you do with them?

Before you file your taxes, here's what you need to know.

Taxes in registered vs. non-registered trading accounts

How your investment account is set up makes a big difference. Registered accounts like a Registered Retirement Savings Plan (RRSP), Tax-Free Savings Account (TFSA), or First Home Savings Account (FHSA) offer tax-deferred or tax-free growth, depending on the account type, while non-registered accounts can create taxable income every year.

First, let's look at the tax advantages of three types of registered accounts: the TFSA, the RRSP, and the FHSA.

What is a TFSA?

The Tax-Free Savings Account is suitable for short-, medium-, and long-term savings goals. These accounts can hold cash and a wide range of qualifying investments, such as stocks, bonds, and exchange-traded funds (ETFs).

• Who it's for: Anyone 18 or older with a Social Insurance Number can open a TFSA. Contribution room starts to accumulate the year you turn 18, not when you open the account.
• How it works: You contribute after-tax dollars, and any growth (interest, dividends, or capital gains) stays tax-free—even when you take the money out.
• Annual contribution limit: The federal government sets an annual TFSA limit that applies equally to all. For 2026, that limit is $7,000. Notably, any unused contribution room carries forward indefinitely, and if you make a withdrawal, you can reclaim that contribution room, but not until the following calendar year. See all the TFSA contribution limits for previous years.

What is an RRSP?

The Registered Retirement Savings Plan was created to encourage Canadians to set aside money for their senior years.

• Who it's for: Canadians saving for retirement who also want a tax deduction to help reduce their income tax today.
• How it works: RRSP contributions lower your taxable income, and investments inside the account grow on a tax-deferred basis. You will pay income tax on amounts you withdraw—presumably in retirement, when you may be in a lower tax bracket than when you were employed. You can also make tax-free withdrawals from an RRSP account to use for a home down payment or to pay for school, provided you return the funds to the account over a preset future time period.
• Annual contribution limit: Your RRSP limit is based on your earned income from the previous year. For 2025, the cap is 18% of that income, up to a maximum of $32,490. Any RRSP room you don't use carries forward. You can check your RRSP contribution limit in your CRA My Account.

What is an FHSA?

The First Home Savings Account is intended to help first-time buyers save toward a down payment on a home.

• Who it's for: Canadians who qualify as first-time homebuyers under federal rules. This generally means you haven't owned a home in the past four years and haven't lived in a home owned by your spouse or partner during that time.
• How it works: FHSA contributions are tax-deductible, and any growth inside the account is tax-free. Withdrawals for a qualifying home purchase are also tax-free. Once you've opened an FHSA, you have 15 years to use the money as a down payment or roll it into an RRSP. (You can also simply withdraw the funds, but that would be taxed as income.)
• Annual contribution limit: You can direct up to $8,000 to your FHSA per year, to a lifetime maximum of $40,000. You can also carry forward up to $8,000 of unused FHSA room.

Taxes and non-registered trading accounts

Non-registered trading accounts offer no tax advantages, but they are flexible and have no limits on contributions or withdrawals.

When filing your taxes, you can claim certain carrying charges and interest related to non-registered trading accounts, including:

• Fees to manage or take care of your unregistered investments.
• Fees for certain investment advice or recording investment income.
• Fees to have someone complete your income tax return, under certain conditions.
• Interest paid on money borrowed for investment purposes, if used to try to earn investment income, including interest and dividends (but not capital gains).

Learn more about claiming carrying charges and interest.

Capital gains: How do they affect your taxes?

When you invest, the value of your holdings will rise and fall over time. If you sell an investment for more than you paid, the amount you make on the sale is your capital gain. For example, if you bought a share for $50 and sold it later for $70, you'd have a $20 gain.

The opposite is a capital loss. If you bought a share for $50 and sold it for $40, your capital loss would be $10. Losses may be disappointing, but they can be useful at tax time because you can apply them against your gains to potentially reduce the amount of capital gains tax you pay.

In Canada, only half of a capital gain is taxable. Many people mistakenly think that capital gains are taxed at 50%—fortunately, that's not the case. For instance, if you have a capital gain of $5,000, then only $2,500 would be added to your income and taxed at your marginal rate. Here's how this might look for someone earning around $60,000 in British Columbia. (The tax rates are based on the 2025 tax year.)

50% of capital gain	$2,500.00
Federal tax (20.5%)	$512.50
Provincial tax (7.7%)	$192.50
Total tax	$705.00
Marginal tax rate on original $5,000 gain	14.1%

The tax slips in your inbox

Early in the year, investors may receive various tax slips for the previous year. These slips summarize the investment income you've earned in a non-registered account and help you report it properly on your tax return.

• A T5 slip, or Statement of Investment Income, reports interest, capital gains dividends, and other dividends from Canadian corporations. If you live in Quebec, you'll also receive an RL-3 with the same information. (If you have a high-interest savings account, you may already be familiar with the T5.) Most T5 slips are issued by the end of February. If you don't receive them by mail, check your CRA My Account.
• A T5008 slip, or Statement of Securities Transactions, lists the details of any securities you bought or sold during the year. Quebec residents also receive an RL-18. The T5008 may not show the adjusted cost base, so keep your own records to ensure your gains or losses are calculated correctly.
• A T5013 slip, or Statement of Partnership Income, shows your share of income and expenses from a general or limited partnership. You might receive one if you invest in a publicly traded partnership or certain types of limited partnerships that hold real estate or energy assets. These slips are usually mailed by the end of March. Quebec taxpayers receive an RL-15 with the same information.

Other slips may appear depending on your situation, including a T3 for trust income, a T4PS for employee profit-sharing plans, or a T4RSP for RRSP withdrawals.

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