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.
B.G. Dodd (613) 995-0051
April 29, 1986
Dear:XXXX
We are writing in reply to your letter of February 3, 1986 concerning paragraph 8 of the Department's Interpretation Bulletin IT-320R .
You have asked for a clear statement that it is the Department's present inter- pretation of the law that a taxpayer using the funds of his self-administered RRSP (registered retirement savings plan) is permitted to invest in a mortgage on his home. We confirm that this is the case and that such a use of the RRSP funds will not result in adverse tax consequences for the taxpayer provided each of the following conditions is satisfied:
- the mortgage is in respect of real property situated in Canada, is administered by an approved lender under the National Housing Act, and is insured under the National Housing Act or by a corporation offering its services to the public as an insurer of mortgages;
- the amount of the mortgage interest rate and other terms reflect normal commercial practice; and
- the mortgage is administered as if it were a mortgage on property owned by a stranger.
We trust the foregoing will be of assistance to you.
Yours truly,
for Director Financial Industries Division Rulings Directorate Legislative and Intergovernmental Affairs Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1986
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1986