| 19(1) | File No. 5-9720 |
| A.B. Adler | |
| (613) 957-8962 |
March 20, 1990
Dear Sirs:
This is in reply to your letter dated February 23, 1990 in which you enclosed a draft mortgage participation agreement ("Agreement"), and requested our views whether this type of mortgage would be a qualified investment for a registered retirement savings plan ("RRSP") under paragraph 146(1)(g) of the Income Tax Act ("Act").
You indicated it is proposed that the mortgage will be administered by a trust company, the mortgagor will not be the annuitant under the RRSP, and the mortgagor will deal at arm's length with the annuitant.
As indicated in paragraph 23 of Information Circular No. 70-6R we do not give written opinions on proposed transactions. However, we are prepared to provide you with the following general comments.
In determining whether an interest in a participating mortgage would be a qualified investment for an RRSP it is necessary to establish if any of the participation features thereunder may give rise to an equity interest in real property.
24(1)
Should you wish to pursue this issue further we suggest that you request a ruling.
We trust that our comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate