Principal Issues: Does the Canada Revenue Agency maintain a list of shares that can not be held in an RRSP (non-qualified share list)?
Position: No.
Reasons: Given the diversity of financial products in the marketplace, and the fact that the attributes of many such products change over time, the CRA does not maintain a list of non-qualified investments for RRSPs purposes.
Signed on February 10, 2005
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable John McCallum, Minister of National Revenue, has asked me to reply to your correspondence addressed to the House of Commons, requesting a list of shares that do not qualify to be held as investments in registered retirement savings plans (RRSPs).
Shares will qualify if they meet certain conditions that are described in the Income Tax Regulations. The determination of whether specific shares qualify is always a question of fact. It would therefore be impossible for the Canada Revenue Agency to create and maintain a list of either qualified or non-qualified shares.
Generally, shares listed on the Over-the-Counter Bulletin Board of the National Association of Securities Dealers Automated Quotation (NASDAQ) system are not eligible investments for RRSPs under the Income Tax Act and the Income Tax Regulations.
Interpretation Bulletin IT-320R3, Qualified Investments - Trusts Governed by Registered Retirement Savings Plans, Registered Education Savings Plans and Registered Retirement Income Funds, contains additional information. The bulletin is available on the CRA Web site at www.cra.gc.ca/E/pub/tp/it320r3.
The importation of motor vehicles is the responsibility of the Canada Border Services Agency. I am therefore forwarding a copy of your correspondence to officials of that department for their consideration.
I trust that the information I have provided will be helpful.
Yours sincerely,
Ed Gauthier
Deputy Assistant Commissioner
Tax and Regulatory Affairs
Policy and Planning Branch
Canada Revenue Agency
Carole Lalonde
948-2226
2005-011045
January 25, 2005