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 the following new two types of securities (Diamonds and Spiders which are traded on the New York Stock Exchange) are qualified investments for a trust governed by an RRSP?
Position: Question of fact and law.
Reasons: Securities must meet the Income Tax Act requirements.
May 21, 1998
THUNDER BAY TAX SERVICES OFFICE HEADQUARTERS
Client Services Division Fouad Daaboul
Attention: Dave Kannegiesser
980850
Qualified investments
We are writing in response to your facsimile of April 2, 1998, wherein you requested whether securities described as Diamonds and Spiders which are traded on the New York Stock Exchange, are qualified investments for a trust governed by an RRSP?
Investments that qualify under subsection 146(1) of the Income Tax Act (the “Act”) include investments described in any of (a), (b), (d) and (f) to (h) of the definition "qualified investment" in section 204 of the Act and investments prescribed in section 4900 of the Income Tax Regulations (the "Regulations").
For purposes of these definitions, and more specifically paragraph (h) of the definition in section 204 of the Act, the only qualified investments that are listed on a prescribed stock exchange, including the New York Stock Exchange as listed in subparagraph 3201(o)(ix) of the Regulations, are shares.
The term “share” is defined in subsection 248(1) of the Act. A share means a share or fraction of a share of a corporation’s capital stock. Pursuant to subsection 248(1), the term “corporation” includes an incorporated company regardless of where it is incorporated.
More information is required to provide an opinion; however, it is a question of fact and law as to whether the Diamonds and Spiders are qualified investments for an RRSP under the above mentioned provisions.
We trust our comments will be of assistance to you. Should you wish to discuss this further do not hesitate to call us.
Paul Lynch
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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