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:
RESPs - Does the requirement that a student must be in a "qualifying educational program" apply to pre-February 21, 1990 individual plans?
Position TAKEN:
No - requirement only applies to individual plans entered into after February 20, 1990.
Reasons FOR POSITION TAKEN:
Technical notes and history, review of grandfathered plan in question. (See E9301935 and E9319645 re current law.)
XXXXXXXXXX 951208
May 11, 1995
Dear XXXXXXXXXX
Re: Qualifying Educational Program
Registered Education Savings Plans ("RESP"s)
This is in reply to your facsimile transmission of May 2, 1995, in followup to our telephone conversations of May 1 and 2 on the above-noted subject (XXXXXXXXXX/Stalker).
Paragraph 146.1(2)(g) of the Income Tax Act (the "Act") states that an RESP must not allow for the payment of an "educational assistance payment" to an individual unless the individual is, at the time the payment is made, a student in full-time attendance at a post-secondary educational institution and enrolled in a "qualifying educational program" at the institution. Non-compliance with this requirement can result in the revocation of the registration of an RESP. An "educational assistance payment" and a "qualifying educational program" are defined in subsection 146(1) of the Act. You are concerned that a program at the XXXXXXXXXX may be excluded from the definition of a qualifying educational program as the definition does not include a program if the student receives, from a person with whom the student is dealing at arm's length, any allowance, benefit, grant or reimbursement for expenses of the program.
Paragraph 146.1(2)(g) of the Act only applies to plans entered into after February 20, 1990. In our opinion, and based on the review of the RESP Agreement which you sent us which we understand has not been altered after February 20, 1990, such a plan would be grandfathered for the purposes of this provision, if it were entered into before that date. We also refer you to Information Circular 93-3, a copy of which is enclosed. Subparagraph 14(e) of the Circular also refers to the requirement of a qualifying educational program, as defined in the Act. However, the note at the end of paragraph 14 states (emphasis added):
The conditions described in items (e), (f), (g), and (i) apply to individual contracts entered into after February 20, 1990;... Previously approved specimen plans that do not include these provisions must be amended....
These comments are an expression of opinion only and therefore are not binding on the Department. We trust, however, that they will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
c.c.: Carol Campbell
Registered Plans Division
Encl.
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