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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Can a public trustee enter into an education savings plan on behalf of a parent of a child?
Position: Question of fact.
Reasons: Corporations and trusts are prohibited from entering into an education savings plan. The facts in each particular situation involving a public trustee would have to be reviewed in order to make this determination.
XXXXXXXXXX 2000-005052
M. P. Sarazin
Attention: XXXXXXXXXX
November 9, 2000
Dear Sir\Madam:
Re: Public Trustee Entering into an RESP Contract
This is in reply to your facsimile of October 16, 2000, requesting our views as to whether a public trustee could enter into an education savings plan contract with a registered education savings plan (RESP) promoter on behalf of a parent of the particular child that will be the named beneficiary under the RESP.
In your letter you have outlined an actual fact situation related to proposed transactions. As noted in Information Circular 70-6R3 (available at your local tax services office or on the internet at www.ccra-adrc.gc.ca/formspubs/menu-e.html), this directorate can only provide an opinion concerning the tax consequences associated with specific proposed transactions in the form of an advance income tax ruling. Consequently, we can only provide you with the following general comments.
The determination of whether a public trustee in a specific situation is entitled to enter into an education savings plan is a question of fact.
We note that an "individual" is defined in subsection 248(1) of the Income Tax Act (the "Act") to mean a person other than a corporation. The expression "person" is defined in subsection 248(1) of the Act to include any corporation, and any entity exempt, because of subsection 149(1), from tax under Part I on all or part of the entity's taxable income and the heirs, executors, administrators or other legal representatives of such a person, according to the law of that part of Canada to which the context extends.
An "education savings plan" is defined in subsection 146.1(1) of the Act to mean a contract made at any time between either one individual (other than a trust) or an individual (other than a trust) and the spouse or common-law partner of the individual and a person or organization (the "promoter") under which the promoter agrees to pay or to cause to be paid educational assistance payments to or for one or more beneficiaries.
It is clear that if the public trustee is a corporation or acts in its capacity as trustee of a trust then it is prohibited from establishing an education savings plan. This determination would require a review of all of the facts in each particular situation.
We trust that our comments will be of assistance.
Yours truly,
Roberta Albert, CA
for Director
Financial Industries Division
Income Tax Rulings Directorate
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