Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
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: Are GST refunds qualified investments for an RRSP?
Position: No
Reasons: Tax refunds are not considered "bonds, debentures, notes, mortgages or similar obligations of, or guaranteed by, the Government of Canada" as contemplated by subclause 212(1)(b)(ii)(C)(I).
XXXXXXXXXX 2000-004969
S. E. Thomson
Attention: XXXXXXXXXX
November 8, 2000
Dear XXXXXXXXXX:
Re: GST Refunds as Qualified Investments for an RRSP
This is in reply to your letter of October 2, 2000 in which you ask if GST refunds are qualified investments for a trust governed by a registered retirement savings plan (an "RRSP").
Investments which are qualified investments for a trust governed by an RRSP are set out in section 146 of the Income Tax Act (the "Act"). Included in the list of qualified investments are bonds, debentures, notes, mortgages or similar obligations of, or guaranteed by, the Government of Canada as set out in subclause 212(1)(b)(ii)(C)(I) of the Act.
In our view, a tax refund owing by the Government of Canada pursuant to the Excise Tax Act would not constitute a qualified investment as contemplated by subclause 212(1)(b)(ii)(C)(I) of the Act.
Where a trust governed by an RRSP acquires a non-qualified investment, the fair market value of the investment is included in the income of the annuitant of the RRSP by virtue of subsection 146(10) of the Act.
We trust that our comments will be of assistance.
Yours truly,
R. Albert
for Director
Financial Industries Division
Income Tax Rulings Directorate
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