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.
Principal Issues: Can a stepchild be added to a family RESP set up by a grandparent?
Position: Yes.
Reasons: In our view, the provisions of subsections 251(6) and 252(1) will, in combination, mean the stepchild of the natural child of a subscriber can be a member of a family plan as described in subsection 146.1(2)(j). Registered Plans Directorate concurred with this position.
XXXXXXXXXX
January 27, 2005 2004-010705
W. C. Harding
Dear XXXXXXXXXX:
Re: RESP Beneficiaries
This is in reply to your letter of November 1, 2004, in which you requested clarification of whether a stepchild of your daughter can be a beneficiary of a family RESP under which you are the subscriber.
Written confirmation of the tax implications inherent in particular transactions can be provided by this Directorate where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advanced Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, any inquiries should be addressed to the relevant tax services office. However, we are prepared to provide the following comments that may be of assistance to you. Please note that these comments are general in nature and are not binding on the Canada Revenue Agency ("CRA").
As indicated in paragraph 12 of Information Circular 93-3R Registered Education Saving Plans, stepchildren are considered to be connected to their stepparents because they are the children of their stepparent's spouse or common-law partner. In our view stepchildren will also be connected to the parents of the stepparent (the "step-grandparents") and may be included as beneficiaries (together with other beneficiaries that are connected with the step-grandparents) of a family RESP, under which the step-grandparents are the subscribers.
This position will also apply for the purposes of the Canada Education Savings Grant Program.
We trust our comments will be of assistance to you.
Yours truly,
Roberta Albert, CA
for Director
Financial Industries Division
Income Tax Rulings Directorate
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