21 February 1984 Income Tax Severed Letter

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.

MEMORANDUM

DATE: February 21, 1984

TO Mr. J.S. Fullarton A/Director Registration Division

ATTENTION Mr. Jesberger

FROM Non-Corporate Rulings Division M.E. Bartley 995-0051

RE: Registered Investments Your memo of January 11

In our opinion a trust or corporation becomes a registered investment as of the date upon which it was accepted by the Minister within section 204.4 of the Act. We take it from subsection 204.4(1) that the particular date is the one specified by the taxpayer in the application for registration if it was, in fact, qualified for registration on that date.

We agree that if a trust or corporation becomes a registered investment upon a date during a calendar year it constitutes a qualified investment within Regulation 4900(1) (a) for a plan which acquired its units or shares at an earlier time in that year.

It is not so certain that a trust will be caught under subsection 206(1) in respect of the foreign property which it had acquired before it became a registered investment. As we read that subsection it catches a taxpayer upon an amount calculated by reference to ". . . the fair market value, at the time of its acquisition by a taxpayer described in any of paragraphs 205(a) to (f), of a foreign property . . ." In the particular circumstances it was not a registered investment (i.e. a taxpayer described in paragraph 205(a)) that acquired the property but one which became a registered investment at a later time. Since this produces a result which was probably unintended, it is our view that subsection 206(1) should be applied at the end of each month during which the trust is a registered investment even if some of the foreign property which may trigger Part XI tax was acquired before registered investment status was achieved.

for Director Non-Corporate Rulings Division