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.
DATE February 19, 1988
TO Registration Directorate Registered Pension and Deferred Income Plans Division
Dianne Coates Pension Officer
FROM Bilingual Services Section R. Lafontaine 957-8978
SUBJECT: Section 204.4 of the Income Tax Act (the "Act")
This is in reply to your Memorandum dated November 26, 1987 regarding the acceptability of a proposed arrangement as a "registered investment" under section 204.4 of the Act.
A taxpayer does not need to request nor receive a formal ruling to be considered as a mutual fund trust under the Act, but he has to meet all conditions of subsection 132(6) of the Act. One of those conditions is that a mutual fund trust has to be a "unit trust" under subsection 108(2).
The XXXX governed by the laws of the Province of Quebec, can not be unit trusts under subsection 108(2) because they do not qualify as "inter vivos trust" under Article 981 of the Civil Code. These Funds therefore do not meet all the essential requirements of subsection 108(2) of the Act.
The fact that the Quebec Securities Commission has exempted the XXXXXXXX from the filing requirement provided for in Section 46 of the "Commission des valeurs mobilières du Québec" Act, does not change the fact that the conditions of the Income Tax Act must be met.
Furthermore, we agree with your view that the agreement does not seem to satisfy another condition of the definition of a "unit trust", that is that the units have to be redeemable at the demand of the holders.
Bilingual Services and Resource Industries Division Rulings Directorate
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