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:
Confirming mortgage secured by leasehold interest in real property is a qualified investment; confirming an interest in a mortgage secured by real property (including a leasehold interest in real property) is a qualified investment.
Position:
As above.
Reasons:
Reiterating 4900(4) together with extended meaning of "real property" in 248(4).
XXXXXXXXXX 963671
November 19, 1996
Re: Subsection 4900(4) of the Income Tax Regulations
This is in reply to the facsimile transmission of November 1, 1996, from XXXXXXXXXX, requesting that we confirm two specific positions and send them to the above-noted addressees. The two positions with respect to qualified investments for a registered retirement savings plan ("RRSP") or registered retirement income fund ("RRIF") are confirmed as follows:
In accordance with subsection 248(4) of the Income Tax Act (the "Act") an interest in real property includes a leasehold interest in real property (other than an interest as security only). In accordance with subsection 4900(4) of the Income Tax Regulations (the "Regulations") a mortgage secured by real property situated in Canada or an interest therein, is a qualified investment for an RRSP or RRIF if the mortgagor is a person who deals at arm's length with the annuitant of the plan or fund, as the case may be. Therefore, we confirm that
1.a mortgage secured by a leasehold interest in real property situated in Canada is a qualified investment for an RRSP or for a RRIF if the mortgagor is a person who deals at arm's length with the annuitant of, as the case may be, the plan or fund, and the leasehold interest is not a security interest only, and
2.an interest in a mortgage secured by real property (including a leasehold interest in real property other than an interest as security only) situated in Canada is a qualified investment for an RRSP or for a RRIF if the mortgagor is a person who deals at arm's length with the annuitant of, as the case may be, the plan or fund.
The foregoing comments are an expression of opinion only and are not binding on the Department. We trust, however, that they assist.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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© Her Majesty the Queen in Right of Canada, 1996
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