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:
Whether depositary RRSP's can hold foreign currency and whether foreign currency is "foreign property".
Position TAKEN:
Depositary RRSP's must hold funds as a "deposit"; foreign currency situated in Canada is not foreign property.
Reasons FOR POSITION TAKEN:
Wording of 146(1)(j)(ii)(C) and 206.
XXXXXXXXXX 941699
Attention: XXXXXXXXXX
August 4, 1994
Dear Sirs:
Re: Registered Retirement Savings Plan (RRSP)
Investment in Foreign Currency
This is in reply to your letter of June 30, 1994, in which you ask us to confirm that depository RRSP's can hold term deposits denominated in foreign currency. You also ask us to confirm that such currency held in an RRSP would not be subject to the foreign property restrictions of the Income Tax Act applicable to registered plans. Unless as otherwise stated all references to the Income Tax Act are to the Income Tax Act S.C. 1970-71-72, c. 63 as amended, consolidated to June 10, 1993 - the "Act".
Where the relationship between the annuitant and the retirement savings plan issuer is as described in clause 146(1)(j)(ii)(C) of the Act, the only restrictions on the type of investment held in the RRSP is that imposed by the definition itself. The retirement savings plan in these cases is an arrangement under which an individual makes a payment "as a deposit with a branch or office in Canada of a person who is, or is eligible to become, a member of the Canadian Payments Association or a credit union that is a shareholder or member of a body corporate referred to as a "central" for purposes of the Canadian Payments Association Act".
There are no other provisions in the Act which limit the investments held by a depositary RRSP. The "qualified investment" rules apply only to retirement savings plans described in clause 146(1)(j)(ii)(A) where payments are made by an individual "in trust" to a corporation as described in that clause.
With respect to the foreign property content limits, foreign currency situated in Canada is not foreign property (see paragraph 3(e) of Interpretation Bulletin IT-412R - "Foreign Property of Registered Plans").
Although the foregoing comments are an expression of opinion only and are not binding on the Department, we trust they are helpful.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
Policy and Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1994
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1994
Email this Content