How does CRA treat a MIC investment?
Under Section 130.1 of the Income Tax Act, there are several requirements. These include: • A MIC is a tax-exempt corporation. • A MIC must have at least 20 shareholders with no one shareholder holding more than 25% of the MIC’s total capital. • At a minimum, 50% of a MIC’s assets must be comprised of residential mortgages, and/or cash and insured deposits at Canada Deposit Insurance Corporation member financial institutions. • While a MIC may accept investment capital from outside of Canada, all MIC investments must be made in Canada. • A flow-through investment vehicle, a MIC distributes 100% of its net income to its shareholders. • MIC shares not held within RRSPs or RRIFs, are taxed as interest income in the shareholder’s hands. For more information on Sun Country MIC, you can download the Offering Memorandum by [clicking here].
