Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:Re: LSVCCs; must RRSPs use only new contributions to fund LSVCC share purchases?
Position TAKEN:No
Reasons FOR POSITION:Department of Finance position adopted
XXXXXXXXXX 5-943272
Attention: XXXXXXXXXX
January 24, 1995
Dear Sirs:
Re: Definition of a "Qualifying Trust"
This is in reply to your facsimile of December 16, 1994 in respect of the definition of a "qualifying trust" as defined in subsection 127.4(1) of the Income Tax Act (the "Act"). Specifically, you wish to know what amounts held in a registered retirement savings plan (an "RRSP") can be used to acquire shares of a prescribed labour sponsored venture capital corporation (an "LSVCC").
Revenue Canada has adopted the view that an RRSP will be a qualifying trust for an individual in respect of a share if contributions to the RRSP made by the individual in a year or a preceding year (and no other funds) are used to acquire or subscribe for the share and the annuitant of the RRSP is the individual or a spouse of the individual.
It is a question of fact what amounts held in an RRSP are contributions.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
