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.
| |
April 4, 1990 |
| SASKATOON DISTRICT OFFICE |
HEAD OFFICE |
| Audit Review |
Financial Industries Division |
| |
W.C. Harding |
| |
957-0953 |
| |
File No. 7-4781 |
SUBJECT: 24(1) as qualified investments for an RRSP
This is in reply to a referral to us by Marilyn Brown of your office on February 20, 1990.
24(1)
In our opinion, in these circumstances, any individual who is or is related to an employee of any of the 24(1) group of corporations would be a designated shareholder of 24(1) in accordance with the provisions of paragraph 4901(2)(d) of the Income Tax Regulations (the Regulations) with the result that 24(1) is not a qualified investment, for an RRSP of which the designated shareholder is the annuitant.
While an RRSP of an employee of a 24(1) company may not hold a share of 24(1) directly, the RRSP could hold an interest in a small business investment limited partnership (SBILP) or in a small business investment trust (SBIT) which may in turn hold shares of 24(1). This option is explained in depth in the Article provided by your office; office Investment in Small Business Through Registered Retirement Savings Plans, Canadian Tax Journal, Vol. 36, No. 4, p 992.
We trust our comments will be of assistance to you in preparing your reply to 19(1)
for Director Financial Industries DivisionRulings Directorate
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