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.
7-912431 24(1)
Dear Sir or Madam:
This is in reply to your letter of July 10, 199l concerning qualified investments for a registered retirement savings plan ("RRSP").
In particular, you are currently offering to members a new "investment equity share" as sanctioned by the British Columbia Financial Institutions Commission and you request approval and registration, as appropriate, for these shares to qualify as an investment for either a regular or self-directed RRSP at 24(1)
Our Comments
Approval or registration by the Department of a particular type of investment is not a prerequisite for that investment to be a qualified one for a trust governed by an RRSP (an "RRSP trust"). Also, we are unable to confirm that a particular investment is a qualified investment for and RRSP trust since this is a question of fact to be determined both at the time the investment is acquired and from time to time while held by the RRSP trust. We offer, however, the following comments.
As you mention in your letter, paragraph 4900(1)(f) of the Income Tax Regulations provides that "a share of, or similar interest in a credit union" is a qualified investment for an RRSP trust. Accordingly, given the broad interpretation that those words are capable of being given, we are not aware at this time of any reason why the subject shares could not represent a qualified investment for an RRSP trust pursuant to that paragraph.
We note with interest your reference to either a regular or self-directed RRSP. It is not clear to us what you mean by a "regular" RRSP. As noted above, section 4900 of the Regulations is concerned with investments that represent qualified investments for an RRSP trust. Accordingly, if by "regular" you mean an RRSP that is an arrangement involving a deposit by an individual to an institution referred to as a "depositary" in clause 146(1)(j)(ii)(C) of the Income Tax Act, section 4900 of the Regulations is not applicable.
The above comments reflect an expression of opinion only and are not binding on the Department, as explained in paragraph 21 of Information Circular 70-6R2. We trust, however, that they are of assistance.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate
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