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 U.S. options to acquire shares of a Canadian corporation listed on a prescribed stock exchange in Canada are foreign property.
Position TAKEN:
No
Reasons FOR POSITION TAKEN:
Wording of 206(1)(f). (see also 930132, 930329, 921852 and 921781)
952329
XXXXXXXXXX M.P. Sarazin
Attention: XXXXXXXXXX
September 6, 1995
Dear Sirs:
Re: Registered Retirement Savings Plan ("RRSP")
Investment in Call Options
This is in reply to your facsimile dated August 31, 1995, concerning the purchase of call options listed on a U.S. exchange where the property underlying the option is that of a Canadian corporation. You ask whether such an option purchased outside Canada is "foreign property" within the meaning of subsection 206(1) of the Income Tax Act (the "Act").
Generally, a right to acquire property that is foreign property is itself foreign property pursuant to paragraphs 206(1)(f) and (h) of the Act. The fact that this right is traded on a foreign exchange is not relative in determining whether it is a foreign property.
We trust the above comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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