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
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© Her Majesty the Queen in Right of Canada, 1986
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© Sa Majesté la Reine du Chef du Canada, 1986
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