29 March 1994 External T.I. 9406955 - HAA 7234-1 RRSP TRANSACTIONS TIME OF RECORDING

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.

Principal Issues:

When is RRSP trustee required to record property transactions?

Position TAKEN:

For the purposes of the foreign content rules, at the time they occur or at the very least monthly

Reasons FOR POSITION:

Routine application of the law.

XXXXXXXXXX		5-940695

Attention: XXXXXXXXXX

March 29, 1994

Dear Sirs:

Re: Cost Amount of Foreign Property in an RRSP

This is in reply to your letter of March 17, 1994 in which you asked when the trustee of an RRSP trust must record the trust's financial transactions for the purpose of determining the foreign content of the trust. In particular you want to know if amounts such as dividends and interest must be recorded as they are received or if they can be recorded on periodic basis such as quarterly.

The tax payable by an RRSP trust on excess foreign property holdings is calculated on the basis of the cost amount of the trust's property at the end of each month. Accordingly, the trustee of the plan must record the cost amount of all property received by the trust as it is received or, at least, by the end of the month in which it is received.

You should also note that some funds pay dividends in the form of additional units. An RRSP trustee must also include these additional units as property of the trust at the time they are received.

The above comments are based on our understanding of the law as it applies in general and may or may not apply to the circumstances of a particular case. They do not form an advance income tax ruling and they are not binding on the Department.

Yours truly,

for Director
Financial Industries Division
Rulings Directorate