5-910897
Dear Sirs:
Re: Qualified Investments - RRSP
24(1)
We are writing in reply to your letter of April 1, 1991, in which you request our advice concerning a proposal by the above-named client to issue to self-directed RRSPS, corporate notes secured by way of an irrevocable assignment of its rights as a mortgage.
As indicated in Information Circular 70-6R2, we do not provide written opinions on proposed transactions other than in reply to an advance ruling request submitted in the manner set out in that circular. The following comments are therefore of a general nature only.
Whether a particular investment is a qualified investment for an RRSP can be determined only at the time the investment is acquired by the plan. Corporate notes of a closely-held provincial corporation are not, as you point out, qualified investments for RRSP's under the Income Tax Act.
An interest is a mortgage secured by real property situated in Canada is a qualified investment pursuant to subsection 4900(4) of the Regulations. However, whether the notes described in your letter are evidence of such an interest in a mortgage is a question of fact which can only be determined by reference to all of the pertinent documentation on a case-by case basis.
We trust that our comments are of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate