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 interest in a second mortgage on specific real property owned by a church and given as security to bondholders would be considered to be an interest in a mortgage in respect of real property in Canada by the individual bondholders such that the said mortgage would be considered a qualified investment for an RRSP.
Position TAKEN:
General comments provided
Reasons FOR POSITION TAKEN:
The request appears to relate to completed transactions. Department will, as stated in IC70-6R3, only provide certainty on the tax consequences of proposed transactions in the context of a request for an advance income tax ruling.
XXXXXXXXXX 5-992395
P. Diguer CGA
Attention: XXXXXXXXXX
September 29, 1999
Dear Sir:
Re: "Qualified Investment" for a
Registered Retirement Savings Plan ("RRSP")
This is in reply to your letter dated August 31, 1999, in which you request confirmation that the views set out in our technical opinion letter # 5-7346 dated January 25, 1989 (the "Letter") are still current. The Letter discussed the qualified investment rules concerning an interest in a mortgage in respect of real property in Canada.
As stated in paragraph 9 of Interpretation Bulletin IT-320R2 (copy enclosed), a mortgage secured by real property situated in Canada, or an interest therein, is a qualified investment for an RRSP, as provided in paragraph 4900(1)(j) and subsection 4900(4) of the Regulations,
(a) in any case where the mortgage is administered by an approved lender under the National Housing Act and is insured under the National Housing Act or by a corporation offering its services to the public as an insurer of mortgages, or
(b) in any other case, where the mortgagor is not the annuitant under the plan and deals at arm's length with the annuitant.
As stated in our Letter, if the bonds in question could be considered to be an interest in a mortgage in respect of real property, they could qualify under either the above-noted paragraph or subsection if the other conditions therein are satisfied. We confirm the legislation has not changed since the date of our Letter.
We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
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