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:
Is a public corporation that is no longer listed on a prescribed stock exchange in Canada still a qualified investment for an RRSP?
Position: It may be.
Reasons:
If the company is still a public corporation pursuant to paragraph (c) of the definition of "public corporation" in subsection 89(1) it will continue to be a qualified investment by virtue of paragraph 4900(1)(b).
XXXXXXXXXX 2002-016864
P. Kohnen
November 19, 2002
Dear XXXXXXXXXX:
Re: Request for technical interpretation - Delisted shares
This is in reply to your written enquiry of October 9, 2002 to the Surrey Tax Centre, which has been forwarded to our Directorate for response, as well as your subsequent letters of October 16, 2002 and November 12, 2002, and further to our telephone conversation (XXXXXXXXXX/Kohnen) of November 14, 2002, wherein you requested our views with respect to whether shares of your corporation would constitute a qualified investment for a registered retirement savings plan ("RRSP").
Written confirmation of the tax implications inherent in particular transactions are given by this Directorate only where the transactions are proposed and are the subject matter of an advanced income tax ruling request. Where the particular transactions are completed, the enquiry should be addressed to the relevant Tax Services Office. However, we are prepared to provide the following general comments, which may be of assistance.
The types of property that constitute qualified investments for RRSPs are described in the definition of "qualified investment" in subsection 146(1) of the Income Tax Act (the "Act"). Paragraph (a) of that definition includes certain of the investments listed in the definition of "qualified investment" in section 204 of the Act. Pursuant to paragraph (d) of the definition in section 204, a share listed on a prescribed stock exchange in Canada is a qualified investment for an RRSP. Pursuant to paragraph (h) of the definition in section 204, a share listed on a prescribed stock exchange in a country other than Canada is also a qualified investment for an RRSP.
Section 3200 of the Income Tax Regulations (the "Regulations") lists the stock exchanges in Canada that are prescribed for purposes of the Act. Section 3201 of the Regulations lists prescribed stock exchanges outside of Canada. It should be noted that the National Association of Securities Dealers Automated Quotation System (NASDAQ) Over-the-Counter (OTC) Bulletin Board facility, as well as other over-the-counter facilities or exchanges such as the Canadian OTC Automated Trading System, are not prescribed stock exchanges.
Pursuant to paragraph 4900(1)(b) of the Regulations, a share of the capital stock of a public corporation other than a mortgage investment corporation will be a qualified investment for an RRSP. In accordance with the definition of "public corporation" in subsection 89(1) of the Act, any corporation that was a public corporation after June 18, 1971, because it was resident in Canada and its shares were listed on a prescribed exchange in Canada, will continue to be a public corporation even if its shares cease to be so listed, as long as the corporation continues to be resident in Canada, the corporation has not elected not to be a public corporation (in accordance with subparagraph (c)(i) of the definition of public corporation) and the Canada Customs and Revenue Agency has not notified the corporation that is has been designated not to be a public corporation.
For more information on qualified investments for RRSPs, you may wish to consult Interpretation Bulletin IT-320R3, entitled "Qualified Investments - Trusts Governed by Registered Retirement Savings Plans, Registered Education Savings Plans and Registered Retirement Income Funds" (available at your local tax services office or on the internet at www.ccra.gc.ca/formspubs/menu-e.html).
We trust that the above comments are of assistance.
Yours truly,
Roberta Albert, CA
for Director
Financial Industries Division
Income Tax Rulings Directorate
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