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: Will flying lessons qualify as a "qualified educational program" or as a "specified educational program" under the RESP provisions?
Position: General comments were provided.
Reasons: It is a question of fact.
XXXXXXXXXX W. C. Harding
613-957-8953
October 1, 2007
Dear XXXXXXXXXX:
Re: Registered Educational Savings Plans (RESP)
This is in reply to your facsimile of September 18, 2007, wherein you requested information regarding your ability to use your RESP to obtain a pilot's license through a flight training school.
Written confirmation of the tax implications inherent in particular transactions may only 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. The following comments are, therefore, of a general nature and are not binding on the Canada Revenue Agency (CRA).
All publications referred to herein can be accessed on the CRA website at the following address: http://www.cra-arc.gc.ca/tax/technical/incometax/menu-e.html.
From your facsimile, it is our understanding that your son has registered with a flying school that is a designated educational institution in Canada and qualifies as a "post secondary educational institution" for purposes of the RESP rules. Your concern appears to be whether the program offered by the school will be a qualified program.
On June 22, 2007, a number of the provisions of the RESP legislation were amended to provide additional flexibility in using RESPs. Previously, an RESP was permitted to make an educational assistance payment (an EAP) to an individual under an RESP only where the individual was enrolled in a "qualifying educational program" as a full- or part-time student at a post-secondary educational institution. To qualify as a "qualifying educational program" a program has to satisfy several conditions including a requirement that it involve at least 10 hours per week on courses or work in the program. The law has now been amended to accommodate certain qualifying part-time programs and is generally consistent with those that apply for purposes of the part-time education tax credit. Specifically, an RESP is now also permitted to make an EAP to an individual who is enrolled as a student in a "specified educational program" at a post-secondary educational institution provided two conditions are met. First, the individual must be at least 16 years of age at the time of the payment. Second, the total amount of EAPs made to the individual under the RESP (and other RESPs of the same promoter) in the preceding 13-week period cannot exceed $2,500. Human Resources and Social Development Canada (HRSDC) may approve a greater amount of EAPs on a case-by-case basis, however it is expected that HRSDC will only do so only in exceptional cases, such as where the cost of tuition for a particular program is substantially higher than average.
A "specified educational program" is a program at a post-secondary school level that is at least 3 weeks duration and that involves at least 12 hours of courses per month.
Given these changes, it appears that the program you described in your facsimile may qualify as a specified educational program. However, it will still be necessary for you to confirm with the school that the criteria noted above will in fact be met.
We trust this explanation will be of assistance to you.
Yours truly,
Wayne Harding
for Director
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
??
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2007
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2007
Email this Content