In response to a query as to whether Part XI.1 tax applies to a non-qualified investment if the property was a qualified investment at the time of its acquisition but then becomes a non-qualified investment, CRA stated:
Under subsection 207.1(1), where a trust governed by an RRSP holds a property that is a non-qualified investment at the end of any month, the trust will be subject to Part XI.1 tax equal to 1% of the fair market value of the property at the time of its acquisition. Consequently, subsection 207.1(1) applies to qualified investments that become non-qualified subsequent to the date of acquisition and are held by the trust governed by the RRSP after becoming non-qualified.