3 September 2008 External T.I. 2008-0280951E5 - Designated Stock Exchange

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.

Principal Issues: Would an investment in a limited partnership unit by an RRSP trust be considered a qualified investment for purposes of the RRSP legislation where the particular units are listed as an investment fund on the Irish Stock Exchange?

Position: Question of fact, the determination as to whether or not a particular tier of a stock exchange would be considered "designated" is not a matter of income tax interpretation

Reasons: Referred to the Department of Finance

								2008-028095
XXXXXXXXXX 							Kimberly Duval, CA
(613) 599-6054
September 3, 2008

Dear XXXXXXXXXX :

Re: Designated Stock Exchange for purposes of the Income Tax Act

We are writing in response to your letter of June 6, 2008, requesting our comments as to whether an investment by a registered retirement savings plan ("RRSP") in a particular limited partnership unit would be considered a qualified investment for purposes of the RRSP legislation of the Income Tax Act (the" Act"). Specifically, you are questioning whether the fact that the particular limited partnership unit is listed as an investment fund on the Irish Stock Exchange would qualify it as 'a security listed on a designated stock exchange' as required by paragraph (d) of the definition of "qualified investment" in section 204 of the Act.

The situation outlined in your correspondence relates to a factual one, involving a specific taxpayer. It is not this Directorate's practice to comment on proposed transactions involving specific taxpayers other than in the form of an advance income tax ruling. Although we cannot comment on your specific situation, we are prepared to provide the following general comments, which may be of assistance.

Paragraph (d) of the definition of "qualified investment" in section 204 of the Act, includes securities (other than futures contracts or other derivative instruments in respect of which the holder's risk of loss may exceed the holder's cost) that are listed on a designated stock exchange. As noted in the Department of Finance technical notes accompanying this recent change to paragraph (d), the wording of the amendment is to expand the types of qualifying listed securities to include, for example, listed units of foreign real estate investment trusts, foreign partnerships and foreign gold and silver exchange traded funds. However, whether or not a particular investment satisfies this requirement under the law is ultimately a question of fact and could only be determined in the context of an Advance Income Tax Ruling.

Further, as we discussed with you in early July (Duval/XXXXXXXXXX ), we cannot confirm whether or not a particular security listed as an "investment fund' on the Irish Stock Exchange would be considered "a security listed on a designated exchange" for purposes of the Act. In our view, this question is not a matter of interpretation of the legislation, but rather a question in relation to the particular make-up and structure of a particular stock exchange. As such, we would suggest you contact the Department of Finance directly in this matter, as they are responsible for determining whether or not any stock exchange or where a stock exchange operates more than one tier, which tier would be considered "designated" for purposes of the Act.

We trust our comments will be of assistance to you.

Yours truly,

Mary Pat Baldwin, CA
for Director
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Policy and Planning Branch