2 April 1990 Administrative Letter 59686 F - Impact of 1990 Budget on Withdrawals from RESP Acquired Prior to Budget Date

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.

April 2, 1990

19(1)

This is in reply to your letter dated February 28, 1990 in which you requested our views concerning the impact of certain budget proposals of February 20, 1990 upon the income tax treatment of withdrawals of income from a registered education savings plan ("RESP") that was acquired prior to that date.

We are not in a position to comment upon any federal budget proposal that is in the format of a Ways and Means Motion, but must await its conversion into draft legislation.  Should you wish to pursue this matter at an early date we suggest that you write to the Department of Finance since such proposals are the responsibility of that Department.

Generally, under the existing provisions of section 146.1 of the Income Tax Act, ("Act") the beneficiary of an RESP trust is entitled to receive educational assistance payments out of trust income that are for the purpose of financing his education at the post-secondary level.  As indicated in paragraph 7 of IT-308R (copy enclosed) such payments and other payments described therein (other than a return of contributions to the RESP subscriber) will be included in the beneficiary's income by reason of the combined application of subsection 146.1(7) and paragraph 56(1)(q) of the Act.

We trust that our comments will be of assistance to you.

Yours truly,

for Director Financial Industries DivisionRulings Directorate