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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: Can a class of units of a mutual fund trust that do not satisfy the conditions in section 4801 of the Regulations qualify as a qualified investment under paragraph 4900(1)(d) of the Regulations?
Position: Yes.
Reasons: The only requirement in 4900(1)(d) is that the investment be a unit of a mutual fund trust. There is no restriction on the class of units acquired.
XXXXXXXXXX 2001-010674
M. P. Sarazin, CA
January 11, 2002
Dear XXXXXXXXXX:
Re: Paragraph 4900(1)(d) of the Income Tax Regulations (the "Regulations")
This is in reply to your facsimile of October 19, 2001, requesting our views as to whether certain units of a mutual fund trust would qualify under paragraph 4900(1)(d) of the Regulations.
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R4, dated January 29, 2001. If your concerns relate to transactions that have already been completed, we suggest that you submit the enquiry to the relevant tax services office, along with all relevant documentation, for review. Consequently, we can only provide the following general comments.
Under paragraph 4900(1)(d) of the Regulations, a unit of a mutual fund trust is a qualified investment for the purposes of paragraph (d) of the definition "qualified investment" in subsection 146(1) of the Act, paragraph (e) of the definition "qualified investment" in subsection 146.1 (1) of the Act, paragraph (c) of the definition "qualified investment" in subsection 146.3(1) of the Act and paragraph (i) of the definition "qualified investment" in section 204 of the Act. Since there are no restrictions in respect of a unit of a mutual fund trust, we are of the view that any unit from the mutual fund trust's different classes of units will satisfy the provisions of paragraph 4900(1)(d) of the Regulations.
We trust these comments will be of assistance.
Yours truly,
Roberta Albert, CA
for Director
Financial Industries Division
Income Tax Rulings Directorate
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