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.
Principal Issues: 1.Whether shares listed on a designated stock exchange are a qualified investment for an RESP? 2. Whether bonds and other debt obligations of a corporation whose shares are listed on a designated stock exchange are a qualified investment for a RESP?
Reasons: Based on the wording of the Act in section 204, definition of "qualified investment".
Position: General comments provided.
XXXXXXXXXX
2010-036719
Gillian Godson
(613) 957-9229
September 20, 2010
Dear XXXXXXXXXX ,
Re: Qualified Investments - Registered Education Savings Plan
This is in response to your email of May 12, 2010, wherein you requested information regarding whether shares listed on a designated stock exchange, and bonds and other debt obligations of a corporation whose shares are listed on a designated stock exchange are qualified investments for a trust governed by a Registered Education Savings Plan ("RESP").
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request. For more information concerning advance income tax rulings, please refer to Information Circular 70-6R5 dated May 17, 2002. Where the particular transactions are completed, the enquiry should be addressed to the relevant Tax Services Office. The following comments are, therefore of a general nature only and are not binding on the Canada Revenue Agency ("CRA"). All publications referred to herein can be accessed on the CRA website at the following address: http://www.cra-arc.gc.ca/formspubs/menu-e.html.
The CRA's general views concerning qualified investments for RESPs are contained in Interpretation Bulletin IT-320R3, "Qualified Investments - Trusts Governed by Registered Retirement Savings Plans, Registered Education Savings Plans and Registered Retirement Income Funds". In general, securities (other than futures contracts or other derivative instruments in respect of which the holder's risk of loss may exceed the holder's costs) that are listed on a designated stock exchange and debt obligations issued by a corporation the shares of which are listed on a designated stock exchange, will be qualified investments for a trust governed by an RESP.
The list of designated stock exchanges can be found on the Department of Finance's website at http://www.fin.gc.ca/act/fim-imf/dse-bvd-eng.asp.
We trust the above comments will be of assistance.
Yours truly,
Mary Pat Baldwin, CA
for Director
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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