20 January 2003 External T.I. 2002-0180395 - PILOT LESSONS AND LIFELONG LEARNING PLAN

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 CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues: Are individual flying lessons eligible for the Lifelong Learning Plan?

Position: Question of Fact.

Reasons: The classes must satisfy the LLP conditions in section 146.02.

2002-018039
XXXXXXXXXX Renée Shields
(613) 948-5273
January 20, 2003

Dear XXXXXXXXXX:

Re: Eligibility of Pilot Training for the Lifelong Learning Plan

This is in response to your facsimile of December 20, 2002 inquiring about whether commercial pilot training will qualify for the Lifelong Learning Plan (LLP).

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only 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, the inquiry should be addressed to the relevant tax services office. The following comments are, therefore, of a general nature only and are not binding on the Canada Customs and Revenue Agency ("CCRA"). All publications referred to herein can be accessed on the CCRA website at the following address: http://www.ccra-adrc.gc.ca/tax/technical/incometax/menu-e.html.

Determinations of the eligibility of educational programs under the LLP are generally made through the local Tax Services Office that serves the particular educational institution. Alternatively, institutions may request a determination of the question by writing to one of the addresses indicated in paragraph 9 of Interpretation Bulletin IT-515R2 Educational Tax Credit. We can however, provide the following general information.

The LLP permits an individual to withdraw an "eligible amount", as defined in subsection 146.02(1) of the Income Tax Act (the "Act"), from their registered retirement savings plan to finance training or education for the individual or their spouse or common-law partner.

In order to qualify as an "eligible amount" within the meaning assigned by subsection 146.02(1) of the Act, the designated person (the student attending school) has to be enrolled at the particular time as a full-time student in a qualifying educational program or must have received written notification before the particular time that the designated person is absolutely or contingently entitled to enrol before March of the following year as a full-time student in a qualifying educational program. Thus, both the requirement that the student be a "full-time student" and that the student be enrolled in a "qualifying educational program" must be satisfied.

In general, a "qualifying educational program", as defined in subsection 146.02(1) of the Act, is an educational program at a designated educational institution that lasts for a period of not less than three consecutive months and requires that the student spend not less than ten hours per week on courses or work in the program. We note that at page 5 of the Lifelong Learning Plan Guide (RC4112), the discussion of qualifying educational program indicates that "courses or work" in the program includes practical training. You have indicated that in your scenario, the individual will be training at his own pace with no formal training schedule. Accordingly, it would be a question of fact whether the particular commercial pilot program would satisfy the definition of "qualifying educational program".

The term "full-time student" is not defined for purposes of the LLP except to extend it to include mentally or physically impaired students enrolled on a part-time basis by reference to subsection 118.6(3) of the Act. Paragraphs 5 to 7 of IT-515R2 provide general comments regarding the CCRA's interpretation of "full-time student". It is our position that it is the responsibility of the educational institution to determine whether the designated person is considered to be a full-time student or not. We should point out that even if the student were to enrol in a program that requires spending 10 hours or more per week on courses or work in the program, it would not be eligible for the LLP if the institution considered the student to be part-time.

As you have indicated that you are satisfied that the flying school is a designated educational institution, we have provided no commentary on this aspect of the LLP requirements.

We trust that these comments will be of assistance.

Yours truly,

Mickey Sarazin, C.A.

for Director
Financial Industries Division
Income Tax Rulings Directorate