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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
SUBJECT: QUALIFIED INVESTMENTS FOR A RRSP SECTION: 146(1)(b)(iv), REG 4900]
5-920710
XXX M.P. Baldwin
(613) 957-8953
Attention: XXX
April 7, 1992
Dear Sirs:
Re: Qualified Investment for Registered Retirement Savings Plan (RRSP)
This is in reply to your letter of March 5, 1992 requesting a technical interpretation on whether or not escrowed shares of a publicly traded company are considered to be a qualified investment for RRSP purposes.
The determination of whether or not escrowed shares are a qualified investment for RRSP purposes is a question of fact which must be determined by looking at each individual escrow agreement. As a general guideline, however, where escrowed shares of the company are actually issued and not simply allotted to a person and the shareholder has all the rights of ownership that every other shareholder has, it is our opinion that the escrowed shares would be identical to "free" shares of the same class.
Therefore, if the "free" shares of a publicly traded company were qualified investments for RRSP purposes then the escrowed shares considered to be identical shares would also be qualified shares for RRSP purposes.
With respect to your second question, the determination of the fair market value of escrowed shares is a question of fact which can only be determined by giving consideration to all the facts in the situation. As such, we must decline to comment on the determination of fair market value of escrowed shares.
We trust the above comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
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