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Thank you for taking my question.

I have lost share certificates of an Indian Company. Living In Canada, it is extremely hard to comply with company procedures of getting a local Police complaint registration, submitting indemnity bond etc., in order to obtain duplicate shares. The net result is that I will never be able to sell or transfer the shares. I have reconciled to this loss situation.

I had declared the value of my stock holding to Canada Revenue Agency in T1135 when I relocated to Canada (returning citizen). I report its current value year after year.

Since the shares are lost and can never be recovered or reinstated, I would like your advice about how the loss that is deemed to have incurred can be accounted for in my tax return that would be acceptable to CRA.

Answer
Ryan,

This is a very interesting situation. Have you tried contacting the transfer agent directly recently? If the agent is an international agent, such as Computershare, they are unlikely to require you to go through all those steps to declare a lost certificate. I have never heard of the requirement to obtain a police compliant, as most certificates are not stolen, just lost (misplaced, tossed out, accidentally destroyed, etc.). Typically, all that is required is a signed statement of loss and the indemnity bond, especially now that transfer agents have phased out paper certificates. You do not need to have the certificate to prove ownership - as long as you are listed as an owner with the registrar/transfer agent, you are a legal owner of the stock.

If you find there is absolutely no other alternative, I would suggest you contact the CRA directly. This is not a typical situation and I am not aware of any procedure to allow you to declare a loss simply because of a lost certificate. Losing the certificate does not change your ownership of the stock, so that would not meet the usual standards necessary to declare  loss. The CRA is likely the only one that can provide you with the correct guidance in this very unusual situation.

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