Words and Phrases - "bond, debenture, note or similar obligation"
4 May 2006 Roundtable, 2005-0161541C6 F - Placements admissibles - dépôts
Is a guaranteed investment certificate or term deposit denominated in Canadian or foreign currency issued by a bank in Canada or a trust company a qualified investment for an RRSP? Before going on to refer to other potential grounds of qualification, CRA stated:
[I]n general, a guaranteed investment certificate or term deposit, denominated in Canadian or foreign currency and issued by a bank in Canada, would qualify as a "bond, debenture, note or similar obligation” specifically described in paragraph (b) of the definition of "qualified investment" in subsection 146(1),
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 204 - Qualified Investment - Paragraph (b) | GIC or term deposit is a similar obligation | 94 |
| Tax Topics - Income Tax Act - Section 204 - Qualified Investment - Paragraph (f) | GIC could qualify under para. (b) or (f) | 123 |
| Tax Topics - Income Tax Act - Section 204 - Qualified Investment - Paragraph (a) | not a qualifying deposit if payable outside Canada or in foreign currency | 181 |
4 April 1991 External T.I. 9104835 F - Interpretation of Bonds, Debentures, Notes or Similar Obligations
In finding that banker’s acceptances were not qualified investments under former s. 204(e)(iii), Revenue Canada stated:
[B]onds, debentures and notes are promises by the issuer of the document to pay a specified amount on the terms set forth in the document and, as such, evidence the indebtedness of the issuer vis-à-vis the person to whom the document is addressed. Banker's acceptances require the person to whom it is addressed to pay a specified amount to a specified person at a specified time. They are not evidence of indebtedness of the issuer. Technically a banker's acceptance is a bill of exchange; bonds, debentures and notes are not. Accordingly it cannot be said that banker's acceptance are obligations which are similar to bonds, debentures and notes … .