Regulation 4901

Subsection (1)

Specified small business corporation

Administrative Policy

S3-F10-C1 - Qualified Investments – RRSPs, RESPs, RRIFs, RDSPs and TFSAs

Timing of qualifications

1.60 The conditions that the corporation be a specified small business corporation, and that the shares not be a prohibited investment, need only be satisfied at the time the RRSP, RRIF or TFSA acquires the shares.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 204 - qualified investment - (a) 208
Tax Topics - Income Tax Act - Section 262 113
Tax Topics - Income Tax Act - Section 204 - qualified investment - (d) 320
Tax Topics - Income Tax Regulations - Regulation 4900 - Subsection 4900(1) - Paragraph 4900(1)(b) 256
Tax Topics - Income Tax Act - Section 204.4 - Subsection 204.4(1) 107
Tax Topics - Income Tax Regulations - Regulation 4900 - Subsection 4900(2) 52
Tax Topics - Income Tax Regulations - Regulation 4900 - Subsection 4900(1) - Paragraph 4900(1)(j) 149
Tax Topics - Income Tax Regulations - Regulation 4900 - Subsection 4900(1) - Paragraph 4900(1)(j.1) 53
Tax Topics - Income Tax Act - Section 204 - qualified investment - (b) 55
Tax Topics - Income Tax Regulations - Regulation 4900 - Subsection 4900(1) - Paragraph 4900(1)(e) 173
Tax Topics - Income Tax Act - Section 207.01 - Subsection 207.01(1) - Advantage - Paragraph (b) 69
Tax Topics - Income Tax Regulations - Regulation 4900 - Subsection 4900(1) - Paragraph 4900(1)(u) 80
Tax Topics - Income Tax Regulations - Regulation 4900 - Subsection 4900(1) - Paragraph 4900(1)(v) 50
Tax Topics - Income Tax Regulations - Regulation 5100 - Eligible Corporation 44
Tax Topics - Income Tax Act - Section 207.04 - Subsection 207.04(4) 82
Tax Topics - Income Tax Act - Section 146 - Subsection 146(10.1) 90
Tax Topics - Income Tax Act - Section 207.01 - Subsection 207.01(6) 110
Tax Topics - Income Tax Act - Section 146 - Subsection 146(4) - Paragraph 146(4)(a) 118
Tax Topics - Income Tax Act - Section 146 - Subsection 146(4) - Paragraph 146(4)(b) 94
Tax Topics - Income Tax Act - Section 146.2 - Subsection 146.2(6) 156

Subsection 4901(2)

Designated Shareholder

Administrative Policy

6 June 1994 T.I. 941182 (C.T.O. "RRSP - Designated Shareholder")

Respecting the situation where a number of the limited partners of an SBILP are RRSP trusts, RC stated that "in our opinion, an annuitant under a trust governed by an RRSP is not related to that RRSP, since there is no rule in subsection 251(2) of the Act which causes an annuitant to be related to the RRSP."

3 February 1992 T.I. (Tax Window, No. 16, p. 15, ¶1725)

Paragraph (d) of the definition of "designated shareholder" does not provide an exception for persons having a nominal interest in a company or having little or no influence concerning its management.

Specified small business corporation

Administrative Policy

S3-F10-C2 - Prohibited Investments – RRSPs, RRIFs and TFSAs

Grace period to restore SSBC status

2.16 ...

Example 2

Shares of XYZ Corporation are a qualified investment under subparagraph 4900(14)(a)(i) by virtue of the corporation being a specified small business corporation (SSBC), as defined in subsection 4901(2) of the Regulations. Midway through its 2016 tax year, the corporation’s asset mix changes such that it no longer meets the definition’s active business test.

XYZ Corporation met the active business test at the end of its 2015 tax year. This means that it will retain its status as an SSBC for the remainder of its 2016 tax year in accordance with the SSBC definition.

The shares will be a prohibited investment at the beginning of the corporation’s 2017 tax year by operation of subsection 4900(15) of the Regulations.

The corporation could avoid the application of subsection 4900(15) if it takes steps to satisfy the active business test at the end its 2016 tax year. ...

27 January 2014 External T.I. 2013-0504191E5 F - RRSP, qualified investment

general discussion of SSBC definition

In the course of a general discussion, CRA stated:

[A]n SSBC is a corporation that would, at that time or at the end of the last taxation year of the corporation that ended before that time, be a “small business corporation” (SBC) within the meaning of the definition in subsection 248(1) of the Act if certain passages of that definition were changed. Among these, note that the corporation must be a Canadian corporation. Principally, it must be a corporation incorporated in Canada, not a Canadian-controlled private corporation. Furthermore, the corporation must not be controlled directly or indirectly in any manner whatever, by one or more non-resident persons.

To qualify as an SSBC ... all or substantially all of the fair market value of the corporation's assets must be attributable to assets that are, inter alia, used principally in an active business carried on primarily in Canada by the particular corporation or by a corporation related to it. This latter requirement must be analyzed in light of the definition of "active business" in subsection 248(1)....

[T]he term "qualifying active business" in subsection 5100(1) is relevant in the context of the analysis of a qualified investment under subsection 4900(6) while the term "active business" in subsection 248(1) of the Act is relevant in the context of a qualified investment by virtue of subsection 4900(14).

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 207.01 - Subsection 207.01(1) - Advantage - Paragraph (a) annuitant's free use of property of corporation held by RRSP is an advantage 81

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