Principal Issues: (1) Whether a property subject to an escrow agreement, being a unit consisting of one common share and one-half warrant, can be held by a trust governed by a TFSA, and if so, is an issuer required to permit the property to be held inside their particular arrangement. (2) How to determine the amount of the contribution into the TFSA, and in particular how to properly value the warrants.
Position: General comments provided.
Reasons: (1) Longstanding position set out in IT-320; (2) Property must be contributed at the property's FMV, which is a question of fact and an appropriate valuation method must be used in the particular circumstances. In the CRA's view, the intrinsic value of an option, warrant or similar right is not reflective of the option's, warrant's or similar right's FMV.