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: Will the withdrawal of an RESP overcontribution reduce the RESP lifetime limit?
Position: No
Reasons: There is no provision allowing for the reinstatement of the amount, whether the overcontribution is in error or not.
XXXXXXXXXX 983134
M. P. Sarazin
Attention: XXXXXXXXXX
February 17, 1999
Dear Sirs:
Re: RESP Lifetime Limit and Overcontributions
This is in reply to your letter dated December 1, 1998, wherein you requested our views as to whether a “RESP lifetime limit”, within the meaning assigned by subsection 204.9(1) of the Income Tax Act (the “Act”), would be restored by the withdrawal of accidental overcontributions to the registered education savings plan (“RESP”).
Information Circular 93-3 reflects the Department’s general views on RESPs . We note that paragraph 51 of IC 93-3 states:
“Each time an amount is paid into an RESP on behalf of a particular beneficiary, it reduces the amount that can be paid into RESPs on behalf of that beneficiary in the future. A subscriber’s withdrawal of amounts paid into a plan does not reduce the total payments made into RESPs on behalf of a beneficiary.” (emphasis added)
This would be the case whether or not the overcontribution was accidental, relief has been provided by the Minister under subsection 204.91(2) of the Act, the withdrawal was made prior to the application of Part X.4 of the Act or the overcontribution was made in 1994.
We trust that our comments will be of assistance.
Yours truly,
Paul Lynch
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
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