Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed
to be correct at the time of issue, may not represent the
current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis,
peut ne pas représenter la position actuelle du ministère.
964225
XXXXXXXXXX M.P. Sarazin
Attention: XXXXXXXXXX
January 14, 1997
Dear Sirs:
Re: XXXXXXXXXX
This is in reply to your letter dated December 24, 1996, wherein you requested a ruling that shares of XXXXXXXXXX would be a "qualified investment" within the meaning assigned by subsection 146(1) of the Income Tax Act (the "Act"). In our January 6, 1997 telephone conversation (XXXXXXXXXX/Sarazin), you were advised that income tax rulings are only provided where an application is made in accordance with Information Circular 70-6R3 dated December 30, 1996. In any case, we will provide you with the following general comments.
The kinds of property that constitute qualified investments for a registered retirement savings plan are described in subsection 146(1) of the Act and section 4900 of the Income Tax Regulations (the "Regulations").
Under the provisions of paragraph 4900(12)(c) of the Regulations, a qualifying share in respect of a specified cooperative corporation will be a qualified investment. The expressions "qualifying share" and "specified cooperative corporation" are defined in subsection 4901(2) of the Regulations.
A "qualifying share" means a share of the capital or capital stock of the specified cooperative corporation where ownership of the share is not a condition of membership in the corporation, or the annuitant under the plan (or any person related to the annuitant) has not received a payment from the corporation after November 29, 1994 pursuant to an allocation in proportion to patronage in respect of consumer goods or services, and can reasonably be expected not to receive a payment, after the acquisition of the share by the trust governed by the plan, from the corporation pursuant to an allocation in proportion to patronage in respect of consumer goods or services. Where either of the conditions is satisfied then the shares of the specified cooperative corporation would be a qualified investment.
A "specified cooperative corporation" means a cooperative corporation within the meaning assigned by subsection 136(2) of the Act or a corporation that would be a cooperative corporation within the meaning assigned by subsection 136(2) of the Act if the purpose described in that subsection were the purpose of providing employment to the corporation's members or customers.
We trust the above comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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