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 denominated deposits.
Position TAKEN:
Depositary RRSP's must hold amounts as "deposits" but there are no other restrictions in Act on types of investments.
Reasons FOR POSITION TAKEN:
Wording of 146(1)(j)(ii)(C) and 146(1)(g).
XXXXXXXXXX 941700
Attention: XXXXXXXXXX
July 28, 1994
Dear Sirs:
Re: Foreign Currency Denominated Deposits Held in Depositary
Registered Retirement Savings Plan (RRSP)
This is in reply to your advance ruling request of June 29, 1994, and to your facsimile transmission of June 30, 1994, and further to our telephone conversation (Spice/XXXXXXXXXX) of July 26, 1994. As confirmed in the telephone conversation, we are unable to rule because it is a matter of fact whether the XXXXXXXXXX is a "depositary" as that term is used in clause 146(1)(j)(ii)(C) of the Income Tax Act. Furthermore, there is no specific proposed transaction which will take place between identifiable taxpayers at a particular point in time. You asked us, therefore, to reply to your request for a technical interpretation; specifically, whether foreign currency deposits held by a depositary RRSP are qualified investments.
Where the relationship between the annuitant and the retirement savings plan issuer is as described in clause 146(1)(j)(ii)(C) of the Income Tax Act, the only restriction on the type of investment held in the RRSP is that imposed by the description 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 Income Tax 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.
Although the foregoing comments are an expression of opinion only and, therefore, are not binding on the Department, we trust they are satisfactory to your needs.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
Policy and Legislation Branch
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