Revenue Canada Taxation Head Office
A. Seidel (613) 957-8960
February 10, 1989
Dear Sirs:
This is in reply to your letter dated December 1, 1988 with respect to qualified investments for Registered Retirement Savings Plans ("RRSP").
As the situation described in your letter relates to a proposed transaction, it should be the subject of an advance income tax ruling. The procedures to be followed in requesting an advance income tax ruling are described in Information Circular IC 70-6R. Furthermore, we have not received authorization from the taxpayer identified to discuss the particular ruling submitted with your letter and are therefore unable to provide any specific reply at this time. However, the following general comments may be of assistance to you.
It is a question of fact whether an interest in a mortgage held by a trust is a qualified investment for an RRSP. In the situation where the RRSP has a direct interest in the mortgage held by the trust, the mortgage will constitute a qualified investment if all the other requirements of subsection 4900(4) or paragraph 4900(1)(j) of the Income Tax Regulations (the "Regulations") are satisfied. In the situation where the RRSP owns a "unit" in the trust, and not an interest in the mortgage held by the trust, the "unit" will constitute a qualified investment if it meets the requirements of paragraph 4900 (1)(a) of the Regulations.
While we hope our comments are of assistance to you they do not constitute an advance income tax ruling and therefore are not binding on the Department in respect of a specific situation.
Yours truly,
for Director Financial Industries Division Rulings Directorate