Security Interest (GST/HST) Regulations

The Security Interest (GST/HST) Regulations were created by His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 277 of the Excise Tax Act. The Regulations came into force on October 20, 2000.

These Regulations are made under the Excise Tax Act and interpret certain terms used in the legislation. The Regulations define a prescribed security interest, which includes parts of mortgages or hypothecs securing obligations that encumber land or buildings, but only if they are registered before an amount is deemed to be held in trust by a person.

The prescribed security interest also includes insurance or expropriation proceeds relating to land or buildings, adjusted according to the Regulations. However, certain types of security interests, such as liens, priorities, assignments, hypothecs of rents or leases, and mortgage interests or hypothecary rights in equipment or fixtures, are excluded from this definition.

The amount of a prescribed security interest may be limited if an amount deemed to be held in trust by a person is not remitted to the Receiver General or withdrawn within the specified timeframe. The amount is determined by a formula based on the outstanding obligation and the total value of all rights securing the obligation, including guarantees or set-offs.

Overall, the Security Interest (GST/HST) Regulations aim to clarify and regulate certain security interests related to GST/HST, ensuring compliance with the Excise Tax Act.