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.
This file should only be read for purposes of continuity in the discussions on this matter. File 982174 was issued first. File 982248 was then provided to confirm our answer. Further representations were received and these resulted in 982593. A final resolution has subsequently been made and our position is now expressed in file 982976.
Principal Issues:
Are SPDRs and WEBS qualified investments for an RRSP?
Position:
No.
Reasons:
Industry literature on these products clearly indicate that investments are interests in trusts which are not qualified investments for an RRSP. They do not meet the conditions in paragraph 4900(1)(p.1) of the Income Tax Regulations.
XXXXXXXXXX 981742
W. C. Harding
Attention: XXXXXXXXXX
August 25, 1998
Dear Sirs:
Re: Regulation 4900(1)(p.1) of the Income Tax Regulations (the Regulations)
This is in reply to your letters of July 3, 1998, in which you requested our opinion on whether Standard and Poor’s Depositary Receipts (“SPDRs”) would be qualified investments for Registered Retirement Savings Plans (“RRSPs”) and Registered Retirement Income Funds (“RRIFs”) under the above noted Regulation.
We have reviewed a number of financial industry documents pertaining to SPDRs, World Equity Benchmark Shares (“WEBS”) and American Depositary Receipts (“ADRs”). Based on our research we have concluded that an investment in either a SPDR or a WEB represents an interest in a trust and not a right to a share of the capital stock of a corporation where the right is represented by a depository receipt. Accordingly, we are of the opinion that neither SPDRs nor WEBS meet the requirements of paragraph 4900(1)(p.1) of the Regulations. Furthermore it is our opinion that SPDRs and WEBS are not qualified investments for RRSPs or RRIFs under any other provision of the Regulations or the Income Tax Act.
We trust these comments will be satisfactory to your needs.
Yours truly,
Paul Lynch
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
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