| 19(1) | File No. 5-8527 |
| Maureen Shea-DesRosierss | |
| (613) 957-8953 |
October 2, 1989
Dear Sirs:
Re: Subparagraph 146(1)(g)(iv) of the Income Tax Act (the "Act) and subsection 4900(4) of the Income Tax Regulations (the "Regulations")
This is in reply to your letter of August 15, 1989 wherein you request our opinion on whether a participating mortgage secured by real property situated in Canada is a qualified investment for purposes of a Registered Retirement Savings Plan ("RRSP").
As noted in Information Circular 70-6R, we do not give opinions in respect of specific proposed transactions other than as a reply to an advance income tax ruling request. As a consequence thereof, we will only offer the following general comments.
It is a question of fact whether an interest in a mortgage held by a trust is a qualified investment for purposes of an RRSP. Pursuant to subsection 4900(4) of the Regulations, a mortgage secured by real property situated in Canada is a qualified investment for an RRSP unless the mortgagor is the annuitant under the plan or is a person with whom the annuitant does not deal at arm's length.If the above conditions are met, the mortgage would be a qualified investment for purposes of subparagraph 146(1)(g)(iv) of the Act. It is to be noted that it is a question of fact whether persons not related to each other were dealing with each other at arm's length.
Since the four situations you raise in your letter contemplate proposed transactions, they, too, can only be addressed by way of an advance income tax ruling.
We trust the above comments will be of assistance.
Yours truly,
for DirectorFinancial Industries Division