22 April 1993 External T.I. 9301755 F - RESP 25 Year Limit

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.

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Attention:  XXXXXXXXXX

Dear Sirs:

RE:  Registered Education Savings Plans ("RESPs")

This is in reply to your letter of September 22, 1992, regarding the limitation of an RRSP to twenty-five years.

We are not aware of any means by which the existence of a plan can be extended to account for the naming of a younger beneficiary.

If an RESP provides that the subscriber can change the beneficiary under the plan, the renaming of the beneficiary will not, of its own, result in the creation of a new plan. Accordingly the provisions of subsection 146.1(6.1) of the Income Tax Act (the 'Act") as they apply for the purposes of paragraph 146.1(2)(i) of the Act will not be applicable. In such cases, however, paragraph 146.1(2)(i) of the Act will still apply to provide that the plan must be terminated on or before the last day of the 25th year following the year of its inception. This limitation is applicable without regard to the age or identity of the beneficiary.

If on the other hand, the plan provides that amounts held under it can be transferred to a new plan for a new beneficiary; the provisions of subsection 146.1(6.1) of the Act will have application and the deeming provisions will result in the same outcome as described above.

Paragraph 146.1(2)(i) of the Act was enacted in 1991 with application to plans entered into after February 20, 1990. Plans entered into before that date must, in general, comply with the comparable rules that were applicable at the time of registration of the particular plan.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate