Income Tax Regulations (C.R.C., c. 945)

Regulations are current to 2017-11-20 and last amended on 2017-07-01. Previous Versions

PART XLIXRegistered Plans  —  Investments

[2013, c. 40, s. 107]
  •  (1) For the purposes of paragraph (d) of the definition qualified investment in subsection 146(1) of the Act, paragraph (e) of the definition qualified investment in subsection 146.1(1) of the Act, paragraph (c) of the definition qualified investment in subsection 146.3(1) of the Act, paragraph (h) of the definition qualified investment in section 204 of the Act, paragraph (d) of the definition qualified investment in subsection 205(1) of the Act and paragraph (c) of the definition qualified investment in subsection 207.01(1) of the Act, each of the following investments is prescribed as a qualified investment for a plan trust at a particular time if at that time it is

    • (a) an interest in a trust or a share of the capital stock of a corporation that was a registered investment for the plan trust during the calendar year in which the particular time occurs or the immediately preceding year;

    • (b) a share of the capital stock of a public corporation other than a mortgage investment corporation;

    • (c) a share of the capital stock of a mortgage investment corporation that does not hold as part of its property at any time during the calendar year in which the particular time occurs any indebtedness, whether by way of mortgage or otherwise, of a person who is a connected person under the governing plan of the plan trust;

    • (c.1) a bond, debenture, note or similar obligation of a public corporation other than a mortgage investment corporation;

    • (d) a unit of a mutual fund trust;

    • (d.1) [Repealed, 2007, c. 29, s. 32]

    • (d.2) a unit of a trust if

      • (i) the trust would be a mutual fund trust if Part XLVIII were read without reference to paragraph 4801(a), and

      • (ii) there has been a lawful distribution in a province to the public of units of the trust and a prospectus, registration statement or similar document was not required under the laws of the province to be filed in respect of the distribution;

    • (e) an option, a warrant or a similar right (each of which is, in this paragraph, referred to as the “security”) issued by a person or partnership (in this paragraph referred to as the “issuer”) that gives the holder the right to acquire, either immediately or in the future, property all of which is a qualified investment for the plan trust or to receive a cash settlement in lieu of delivery of that property, where

      • (i) the property is

        • (A) a share of the capital stock of, a unit of, or a debt issued by, the issuer or another person or partnership that does not, when the security is issued, deal at arm’s length with the issuer, or

        • (B) a warrant issued by the issuer or another person or partnership that does not, when the security is issued, deal at arm’s length with the issuer, that gives the holder the right to acquire a share or unit described in clause (A), and

      • (ii) the issuer is not a connected person under the governing plan of the plan trust;

    • (e.01) [Repealed, 2007, c. 29, s. 32]

    • (e.1) a share of, or deposit with, a société d’entraide économique,

    • (f) a share of, or similar interest in a credit union;

    • (g) a bond, debenture, note or similar obligation (in this paragraph referred to as the “obligation”) issued by, or a deposit with, a credit union that, except where the plan trust is governed by a registered education savings plan, has not at any time during the calendar year in which the particular time occurs granted any benefit or privilege to a person who is a connected person under the governing plan of the plan trust, as a result of the ownership by

      • (i) the plan trust of a share or obligation of, or a deposit with, the credit union, or

      • (ii) a registered investment of a share or obligation of, or a deposit with, the credit union if the plan trust has invested in that registered investment,

      and a credit union shall be deemed to have granted a benefit or privilege to a person in a year if at any time in that year that person continues to enjoy a benefit or privilege that was granted in a prior year;

    • (h) a bond, debenture, note or similar obligation (in this paragraph referred to as the “obligation”) issued by a cooperative corporation (within the meaning assigned by subsection 136(2) of the Act)

      • (i) that throughout the taxation year of the cooperative corporation immediately preceding the year in which the obligation was acquired by the plan trust had not less than 100 shareholders or, if all its shareholders were corporations, not less than 50 shareholders,

      • (ii) whose obligations were, at the end of each month of

        • (A) the last taxation year, if any, of the cooperative corporation prior to the date of acquisition of the obligation by the plan trust, or

        • (B) the period commencing three months after the date an obligation was first acquired by any plan trust and ending on the last day of the taxation year of the cooperative corporation in which that period commenced,

        whichever of the periods referred to in clause (A) or (B) commences later, held by plan trusts the average number of which is not less than 100 computed on the basis that no two plan trusts shall have the same individual as an annuitant or a beneficiary, as the case may be, and

      • (iii) that, except where the plan trust is governed by a registered education savings plan, has not at any time during the calendar year in which the particular time occurs granted any benefit or privilege to a person who is a connected person under the governing plan of the plan trust, as a result of the ownership by

        • (A) the plan trust of a share or obligation of the cooperative corporation, or

        • (B) a registered investment of a share or obligation of the cooperative corporation if the plan trust has invested in that registered investment,

        and a cooperative corporation shall be deemed to have granted a benefit or privilege to a person in a year if at any time in that year that person continues to enjoy a benefit or privilege that was granted in a prior year;

    • (i) a bond, debenture, note or similar obligation (in this paragraph referred to as the “obligation”) of a Canadian corporation

      • (i) if payment of the principal amount of the obligation and the interest on the principal amount is guaranteed by a corporation or a mutual fund trust whose shares or units, as the case may be, are listed on a designated stock exchange in Canada,

      • (ii) if the corporation is controlled directly or indirectly by

        • (A) one or more corporations,

        • (B) one or more mutual fund trusts, or

        • (C) one or more corporations and mutual fund trusts

        whose shares or units, as the case may be, are listed on a designated stock exchange in Canada, or

      • (iii) if, at the time the obligation is acquired by the plan trust, the corporation that issued the obligation is

        • (A) a corporation that, in respect of its capital stock, has issued and outstanding share capital carried in its books at not less than $25 million, or

        • (B) a corporation that is controlled by a corporation described in clause (A)

        and has issued and outstanding bonds, debentures, notes or similar obligations having in the aggregate a principal amount of at least $10 million that are held by at least 300 different persons and were issued by the corporation by means of one or more offerings, provided that in respect of each such offering a prospectus, registration statement or similar document was filed with and, where required by law, accepted for filing by a public authority in Canada pursuant to and in accordance with the laws of Canada or a province and there was a lawful distribution to the public of those bonds, debentures, notes or similar obligations in accordance with that document;

    • (i.1) a security of a Canadian corporation

      • (i) that was issued pursuant to The Community Bonds Act, chapter C-16.1 of the Statutes of Saskatchewan, 1990, The Rural Development Bonds Act, chapter 47 of the Statutes of Manitoba, 1991-92, the Community Economic Development Act, 1993, chapter 26 of the Statutes of Ontario, 1993, or the New Brunswick Community Development Bond Program through which financial assistance is provided under the Economic Development Act, chapter E-1.11 of the Acts of New Brunswick, 1975, and

      • (ii) the payment of the principal amount of which is guaranteed by Her Majesty in right of a province;

    • (i.11) a share of the capital stock of a Canadian corporation that is registered under section 11 of the Equity Tax Credit Act, chapter 3 of the Statutes of Nova Scotia, 1993, the registration of which has not been revoked under that Act;

    • (i.12) a share of the capital stock of a Canadian corporation that is registered under section 39 of the Risk Capital Investment Tax Credits Act, chapter 22 of the Statutes of the Northwest Territories, 1998, the registration of which has not been revoked under that Act;

    • (i.13) a share of the capital stock of a Canadian corporation that is registered under section 2 of the Community Development Equity Tax Credit Act, chapter C-13.01 of the Revised Statutes of Prince Edward Island, 1988, the registration of which has not been revoked under that Act;

    • (i.2) indebtedness of a Canadian corporation (other than a corporation that is a connected person under the governing plan of the plan trust) represented by a bankers’ acceptance;

    • (i.3) [Repealed, 2009, c. 2, s. 105]

    • (j) a debt obligation of a debtor, or an interest, or for civil law a right, in that debt obligation, where

      • (i) the debt obligation is fully secured by a mortgage, charge, hypothec or similar instrument in respect of real or immovable property situated in Canada, or would be fully secured were it not for a decline in the fair market value of the property after the debt obligation was issued, and

      • (ii) the debtor (and any partnership that does not deal at arm’s length with the debtor) is not a connected person under the governing plan of the plan trust;

    • (j.1) a debt obligation secured by a mortgage, charge, hypothec or similar instrument in respect of real or immovable property situated in Canada, or an interest, or for civil law a right, in that debt obligation, where the debt obligation is

    • (j.2) a certificate evidencing an undivided interest, or for civil law an undivided right, in one or more properties, where

      • (i) all or substantially all of the fair market value of the certificate is attributable to property that is, or is incidental to, a debt obligation secured by

        • (A) a mortgage, charge, hypothec or similar instrument in respect of real or immovable property situated in Canada, or

        • (B) property described in paragraph (a) or (b) of the definition qualified investment in section 204 of the Act that was substituted for the security referred to in clause (A) under the terms of the debt obligation,

      • (ii) the certificate has, at the time of acquisition by the plan trust, an investment grade rating with a credit rating agency referred to in subsection (2), and

      • (iii) the certificate is issued as part of an issue of certificates by the issuer for a total amount of at least $25 million;

    • (k) and (l) [Repealed, 2009, c. 2, s. 105]

    • (m) to (n.1) [Repealed, 2007, c. 29, s. 32]

    • (o) [Repealed, 2009, c. 2, s. 105]

    • (p) and (p.1) [Repealed, 2007, c. 29, s. 32]

    • (q) a debt issued by a Canadian corporation (other than a corporation with share capital or a corporation that is a connected person under the governing plan of the plan trust) where

      • (i) the taxable income of the corporation is exempt from tax under Part I of the Act because of paragraph 149(1)(l) of the Act, and

      • (ii) either

        • (A) before the particular time and after 1995, the corporation

          • (I) acquired, for a total consideration of not less than $25 million, property from Her Majesty in right of Canada or a province, and

          • (II) put that property to a use that is the same as or similar to the use to which the property was put before the acquisition described in subclause (I), or

        • (B) at the time of the acquisition of the debt by the plan trust, it was reasonable to expect that clause (A) would apply in respect of the debt no later than one year after the time of the acquisition;

    • (r) a debt issued by a Canadian corporation (other than a corporation with share capital or a corporation that is a connected person under the governing plan of the plan trust) if

      • (i) the taxable income of the corporation is exempt from tax under Part I of the Act because of paragraph 149(1)(l) of the Act, and

      • (ii) either

        • (A) the debt is issued by the corporation as part of an issue of debt by the corporation for an amount of at least $25 million, or

        • (B) at the time of the acquisition of the debt by the plan trust, the corporation had issued debt as part of a single issue for an amount of at least $25 million;

    • (s) [Repealed, 2009, c. 2, s. 105]

    • (t) a gold or silver legal tender bullion coin

      • (i) that is of a minimum fineness of 995 parts per 1000 in the case of gold and 999 parts per 1000 in the case of silver,

      • (ii) that was produced by the Royal Canadian Mint,

      • (iii) that has a fair market value at the particular time not exceeding 110 per cent of the fair market value of the coin’s gold or silver content, and

      • (iv) that is acquired by the plan trust directly from the Royal Canadian Mint or from a corporation (in paragraphs (u) and (v) referred to as a “specified corporation”)

        • (A) that is a bank, a trust company, a credit union, an insurance corporation or a registered securities dealer,

        • (B) that is resident in Canada, and

        • (C) that is a corporation whose business activities are subject by law to the supervision of a regulating authority that is the Superintendent of Financial Institutions or a similar authority of a province;

    • (u) a gold or silver bullion bar, ingot or wafer

      • (i) that is of a minimum fineness of 995 parts per 1000 in the case of gold and 999 parts per 1000 in the case of silver,

      • (ii) that was produced by a metal refiner included in the London Bullion Market Association’s good delivery list of acceptable refiners for gold or silver, as the case may be,

      • (iii) that bears the hallmark of the metal refiner that produced it and a stamp indicating its fineness and its weight, and

      • (iv) that is acquired by the plan trust either directly from the metal refiner that produced it or from a specified corporation;

    • (v) a certificate issued by a specified corporation or the Royal Canadian Mint representing a claim of the holder of the certificate to property held by the issuer of the certificate, where

      • (i) the property would be property described in paragraph (t) or (u) if those paragraphs were read without reference to subparagraphs (t)(iv) and (u)(iv), respectively, and

      • (ii) the certificate is acquired by the plan trust directly from the issuer of the certificate or from a specified corporation; or

    • (w) an American Depositary Receipt where the property represented by the receipt is listed on a designated stock exchange.

  • (2) For the purposes of paragraph (c.1) of the definition qualified investment in section 204 of the Act, each of the following is a prescribed credit rating agency:

    • (a) A.M. Best Company, Inc.;

    • (b) DBRS Limited;

    • (c) Fitch, Inc.;

    • (d) Moody’s Investors Service, Inc.; and

    • (e) Standard & Poor’s Financial Services LLC.

  • (3) For the purpose of paragraph (h) of the definition qualified investment in section 204 of the Act, a contract with a licensed annuities provider for an annuity payable to an employee who is a beneficiary under a deferred profit sharing plan beginning not later than the end of the year in which the employee attains 71 years of age, the guaranteed term of which, if any, does not exceed 15 years, is prescribed as a qualified investment for a trust governed by such a plan or revoked plan.

  • (4) [Repealed, SOR/2001-216, s. 6]

  • (5) For the purposes of paragraph (e) of the definition qualified investment in subsection 146.1(1) of the Act, paragraph (d) of the definition qualified investment in subsection 205(1) of the Act and paragraph (c) of the definition qualified investment in subsection 207.01(1) of the Act, a property is prescribed as a qualified investment for a trust governed by a registered disability savings plan, a registered education savings plan or a TFSA at any time if at that time the property is an interest in a trust or a share of the capital stock of a corporation that was a registered investment for a trust governed by a registered retirement savings plan during the calendar year in which that time occurs or during the preceding year.

  • (6) Subject to subsections (8) and (9), for the purposes of paragraph (d) of the definition qualified investment in subsection 146(1) of the Act, paragraph (e) of the definition qualified investment in subsection 146.1(1) of the Act and paragraph (c) of the definition qualified investment in subsection 146.3(1) of the Act, a property is prescribed as a qualified investment for a trust governed by a registered retirement savings plan, a registered education savings plan and a registered retirement income fund at any time if at that time the property is not a prohibited investment for the trust and is

    • (a) a share of the capital stock of an eligible corporation (as defined in subsection 5100(1)) unless, in the case of a registered education savings plan, a beneficiary or subscriber under the plan is a designated shareholder of the corporation;

    • (b) an interest of a limited partner in a small business investment limited partnership; or

    • (c) an interest in a small business investment trust.

  • (7) Subject to subsection (11), for the purposes of paragraph (h) of the definition qualified investment in section 204 of the Act, a property is prescribed as a qualified investment for a trust governed by a deferred profit sharing plan or revoked plan at any time if at that time the property is an interest

    • (a) of a limited partner in a small business investment limited partnership; or

    • (b) in a small business investment trust.

  • (8) For the purposes of subsection (6), a property that is held by a trust governed by a registered education savings plan ceases to be a qualified investment for the trust immediately before an amount is received if

    • (a) the property is a share referred to in paragraph (6)(a), an interest in a small business investment limited partnership that holds a small business security, or an interest in a small business investment trust that holds a small business security;

    • (b) a person who is a beneficiary or subscriber under the plan provides services to or for the issuer of the share or small business security, or to or for a person related to that issuer;

    • (c) the amount is received in respect of the share or small business security; and

    • (d) it can reasonably be considered, having regard to all the circumstances (including the terms and conditions of the share or small business security or of any related agreement, and the rate of interest or the dividend provided on the share or small business security), that the amount is on account, in lieu or in satisfaction of payment for the services.

  • (9) For the purposes of subsection (6), where

    • (a) a trust governed by a registered retirement savings plan, a registered education savings plan or a registered retirement income fund holds

      • (i) an interest in a small business investment limited partnership, or

      • (ii) an interest in a small business investment trust

      that holds a small business security (referred to in this subsection as the “designated security”) of a corporation, and

    • (b) a person who is an annuitant, a beneficiary or a subscriber under the plan or fund is a designated shareholder of the corporation,

    the interest shall not be a qualified investment for the trust governed by the plan or fund unless

    • (c) the designated security is a share of the capital stock of an eligible corporation,

    • (d) the partnership or trust, as the case may be, has no right to set off, assign or otherwise apply, directly or indirectly, the designated security against the interest,

    • (e) no person is obligated in any way, either absolutely or contingently, under any undertaking the intent or effect of which is

      • (i) to limit any loss that the plan or fund may sustain by virtue of the ownership, holding or disposition of the interest, or

      • (ii) to ensure that the plan or fund will derive earnings by virtue of the ownership, holding or disposition of the interest,

    • (f) in the case of the partnership, there are more than 10 limited partners and no limited partner or group of limited partners who do not deal with each other at arm’s length holds more than 10 per cent of the units of the partnership, and

    • (g) in the case of the trust, there are more than 10 beneficiaries and no beneficiary or group of beneficiaries who do not deal with each other at arm’s length holds more than 10 per cent of the units of the trust.

  • (10) [Repealed, 2011, c. 24, s. 84]

  • (11) For the purposes of subsection (7), where

    • (a) a trust governed by a deferred profit sharing plan or revoked plan holds

      • (i) an interest in a small business investment limited partnership, or

      • (ii) an interest in a small business investment trust

    that holds a small business security of a corporation,

    • (b) payments have been made in trust to a trustee under the deferred profit sharing plan or revoked plan for the benefit of beneficiaries thereunder by the corporation or a corporation related thereto, and

    • (c) the small business security is not an equity share described in paragraph (e) of the definition qualified investment in section 204 of the Act,

    the interest referred to in subparagraphs (a)(i) and (ii) shall not be a qualified investment for the trust referred to in paragraph (a).

  • (12) For the purposes of paragraph (e) of the definition qualified investment in subsection 146.1(1) of the Act, a property is prescribed as a qualified investment for a trust governed by a registered education savings plan at any time if

    • (a) at the time the property was acquired by the trust,

      • (i) the property was a share of the capital stock of a specified small business corporation,

      • (ii) the property was a share of the capital stock of a venture capital corporation described in any of sections 6700 to 6700.2, or

      • (iii) the property was a qualifying share in respect of a specified cooperative corporation and the plan; and

    • (b) immediately after the time the property was acquired by the trust, each person who is a beneficiary or a subscriber under the plan was not a connected shareholder of the corporation.

  • (13) Notwithstanding subsection (12), where

    • (a) a share that is otherwise a qualified investment for the purposes of paragraph (e) of the definition qualified investment in subsection 146.1(1) of the Act solely because of subsection (12) is held by a trust governed by a registered education savings plan,

    • (b) an individual

      • (i) provides services to or for,

      • (ii) acquires goods from, or

      • (iii) is provided services by

      the issuer of the share or a person related to that issuer,

    • (c) an amount is received in respect of the share by the trust, and

    • (d) the amount can reasonably be considered, having regard to all the circumstances, including the terms and conditions of the share, or any agreement relating thereto and any dividend provided on the share to be

      • (i) on account of, or in lieu or in satisfaction of, payment for the services to or for the issuer or the person related to the issuer, or

      • (ii) in respect of the acquisition of the goods from, or the services provided by, the issuer or the person related to the issuer,

    the share shall, immediately before the amount is received, cease to be and shall not thereafter be a qualified investment for the trust.

  • (14) For the purposes of paragraph (d) of the definition qualified investment in subsection 146(1) of the Act, paragraph (c) of the definition qualified investment in subsection 146.3(1) of the Act and paragraph (c) of the definition qualified investment in subsection 207.01(1) of the Act, a property is prescribed as a qualified investment for a trust governed by a RRIF, RRSP or TFSA at any time if, at the time the property was acquired by the trust, the property

    • (a) was

      • (i) a share of the capital stock of a specified small business corporation,

      • (ii) a share of the capital stock of a venture capital corporation described in any of sections 6700 to 6700.2, or

      • (iii) a qualifying share in respect of a specified cooperative corporation and the RRIF, RRSP or TFSA; and

    • (b) was not a prohibited investment for the trust.

  • (15) For the purposes of the definition prohibited investment in subsection 207.01(1) of the Act, property that is a qualified investment for a trust governed by a RRIF, RRSP or TFSA solely because of subsection (14) is prescribed property for the trust at any time if, at that time, the property is not described in any of subparagraphs (14)(a)(i) to (iii).

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts and regulations. SOR/81-725, s. 4;
  • SOR/83-819, s. 1;
  • SOR/85-202, s. 1;
  • SOR/86-390, s. 2;
  • SOR/86-1092, s. 12(F);
  • SOR/88-165, s. 24(F);
  • SOR/92-660, s. 2;
  • SOR/94-471, s. 1;
  • SOR/94-472, s. 1;
  • SOR/94-686, ss. 26(F), 72(F), 74(F), 75(F), 78(F), 79(F);
  • SOR/95-513, s. 1;
  • SOR/96-450, s. 1;
  • SOR/98-250, s. 1;
  • SOR/99-9, s. 1;
  • SOR/99-81, s. 1;
  • SOR/99-102, s. 1;
  • SOR/2001-216, ss. 6, 10(F),11(F);
  • SOR/2001-289, s. 8(E);
  • SOR/2005-264, s. 6;
  • 2007, c. 29, s. 32, c. 35, ss. 89, 126;
  • SOR/2007-212, s. 2;
  • 2009, c. 2, s. 105;
  • 2011, c. 24, s. 84;
  • SOR/2011-188, s. 20;
  • SOR/2012-270, s. 1;
  • 2013, c. 40, s. 108.
 
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