Words and Phrases - "security"
6 May 2014 CALU Roundtable, 2014-0523321C6 - 2014 CALU Conference
After quoting authorities on the meaning of "security," including a statement in Canadian & Foreign Securities Co. v. M.N.R., [1972] C.T.C. 391 at 395, 72 DTC 6354 at 6356 (F.C.T.D.) referring to "instruments for the payment of money," the questioner submitted that "segregated funds should be considered ‘securities' within the popular sense or commercial meaning of the term." CRA responded:
A segregated fund policy is a contract of insurance and … is not a share or security of the taxpayer. Consequently … paragraph 20(1)(bb) … does not apply to fees paid by a taxpayer in respect of the advisability of the acquisition or disposition of segregated fund policies, or for the administration or management thereof as the requirements of that paragraph are not met.
Charron v. MNR, 87 DTC 98, [1987] 1 CTC 2135 (TCC)
Taxpayers who each purchased an undivided interest in a MURB and were charged a fee by the syndicator of the MURB for its services in finding, evaluating and recommending the investment in the MURB were entitled to the deduction under s. 20(1)(bb) on the ground that the terms "security" and "valeur mobilière" "have the meaning given them in the securities legislation in the three [relevant] Canadian provinces". Because under such legislation the syndication of interests in MURBs constituted the selling of securities, the fee paid to the syndicator was in respect of the advisability of purchasing securities, and the principal business of the syndicator consisted of making such advice.