4 June 2004 External T.I. 2004-0075021E5 - Home Buyers' Plan 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.

Principal Issues: Can a taxpayer repay a portion of the amount already withdrawn under the Lifelong Learning Plan and withdraw this amount under the Home Buyers' Plan without having to wait 90 days after the repayment?

Position: Yes

Reasons: The 89-day period applies only to determine if an amount that is a premium paid to an RRSP can be deductible in computing a taxpayer's income for a taxation year.

XXXXXXXXXX 2004-007502
Michel Lambert
June 4, 2004

Dear XXXXXXXXXX:

Re: Home Buyers' Plan

This is in reply to your E-mail of May 2, 2004 in which you ask for our opinion regarding the Home Buyers' Plan (HBP). You present the following situation.

You would like to withdraw money from your Registered Retirement Saving Plan (RRSP) under the HBP to buy a house. However, you currently have RRSP withdrawals under the Lifelong Learning Plan (LLP). You ask whether you have to wait 90 days after you repay an amount withdrawn under the LLP before you are entitled to withdraw this amount under the HBP. We understand that you will designate the amount repaid as a repayment of an LLP withdrawal under subsection 146.02(3) of the Income Tax Act (the Act).

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. Where the particular transactions are completed, the inquiry should be addressed to the relevant tax services office. However, we are prepared to provide the following comments.

A taxpayer can participate in the HBP, even if he or she has withdrawn funds from his or her RRSP under the LLP. If you participate in the HBP, certain rules limit your RRSP deduction for contributions you make to your RRSP during the 89-day period just before your withdrawal under the HBP. Under these rules, you may not be able to deduct all or part of the contributions made during this period for any year.

You cannot deduct the amount by which the total of your contributions to an RRSP during the 89-day period just before your withdrawal from that RRSP is more than the fair market value of that RRSP after the withdrawal. The same rules apply if you contribute to your spouse's or common-law partner's RRSP during the 89-day period just before you make the withdrawal from the same RRSP under the HBP.

A contribution to an RRSP, as defined under the Act, does not include a repayment to an RRSP under subsection 146.02(3) of the Act. Therefore, we are of the opinion that the amount repaid to the RRSP under the LLP can be withdrawn under the HBP without having to consider the 89-day period.

We trust the foregoing comments are of assistance.

for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Planning Branch