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.
RULINGS DIRECTORATE
CORRESPONDENCE SUMMARY
DOCUMENT TYPE:
Opinion
PRINCIPAL ISSUES:
Does subsection 204.4(4) apply to deem a trust to
continue to be a registered investment where a unit
in the trust would qualify for RRSP purposes in any
event; i.e., a unit in a mutual fund trust.
POSITION TAKEN:
Yes.
REASONS FOR POSITION TAKEN:
The Registered Plans Division has always considered
the provision to apply to all terminated registered
investments.
XXXXXXXXXX
LEGAL:
n/a
FINANCE OPINION:
n/a
JURISPRUDENCE:
n/a
RCT PUBLICATIONS:
n/a
HAA NUMBER:
7200-6
5-932804
XXXXXXXXXX (613) 957-8953
Attention: XXXXXXXXXX
December 6, 1993
Dear Sirs:
This is in reply to your letter of September 28, 1993 asking if the deemed "registered investment" status under subsection 204.4(4) of the Income Tax Act (the "Act") applies where the registered investment was a mutual fund trust.
Under paragraph 4900(1)(a) of the Income Tax Regulations (the "Regulations"), an interest in a trust that was a registered investment continues to be a qualified investment up to the end of the taxation year following the year in which the registered investment status of the trust was terminated by notification under 204.4(3) of the Act (the "Relevant Period"). Subsection 204.4(4) of the Act then deems the trust to continue to be a registered investment during the time that the interest in the trust continues to be a qualified investment by virtue of having been a registered investment.
You ask us to confirm your view that subsection 204.4(4) of the Act does not apply to deem a trust to be a registered investment during the Relevant Period where the interest in the trust is a qualified investment in its own right subsequent to the termination of the registered investment status; e.g., where the interest is a unit of a mutual fund trust that qualifies under paragraph 4900(1)(d) of the Regulations. It is your view that in such a situation, the interest in the mutual fund trust is a qualified investment by virtue of paragraph 4900(1)(d), not by virtue of having been a registered investment.
The Department's position has been that the continued registered investment status under subsection 204.4(4) of the Act applies to all terminated registered investments including a mutual fund trust. This position is being reconsidered by the Registered Plans Division. Should you wish to follow up on the matter, you may contact Mr. Phillip Kohnen at (613) 957-3922. The mailing address is:
Registered Plans Division
4th Floor
400 Cumberland Street
Ottawa, Ontario
K1A 0L8
We trust that our comments are of assistance.
Yours truly,
for Director Financial Industries Division Rulings Directorate
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© Her Majesty the Queen in Right of Canada, 1993
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