14 March 2007 External T.I. 2006-0169821E5 F - REÉÉ - définition de souscripteur
Principal Issues: [TaxInterpretations translation] Can an RESP have more than one subscriber after the death of the original subscriber?
Position: Yes
Reasons: Application of paragraph (c) of the definition of subscriber in subsection 146.1(1)
XXXXXXXXXX 2006-016982 Michel Lambert CA, M.Fisc. March 14, 2007
Dear Madam,
Subject: Registered Education Savings Plan
This is further to the letter XXXXXXXXXX sent to Ms. Lorraine Veilleux on December 29, 2005, and to our telephone conversations (XXXXXXXXXX/Lambert). In the letter, XXXXXXXXXX refers to a specific situation and submits scenarios of planned transactions.
As stated in paragraph 22 of Information Circular 70-6R5 dated May 17, 2002, it is our practice not to issue written opinions on proposed transactions otherwise than by way of advance rulings. Furthermore, when it comes to determining whether a completed transaction has received appropriate tax treatment, that determination is made first by our Tax Services Offices as a result of their review of all facts and documents, which is usually performed as part of an audit engagement. However, we can offer the following general comments that we hope may be helpful to you. These comments may, however, under certain circumstances, not apply to your particular situation.
Unless otherwise indicated, all statutory references herein are to provisions of the Income Tax Act (the "Act").
Subsection 146.1(1) defines "subscriber" under an education savings plan at any time as
(a) each individual or the public primary caregiver with whom the promoter of the plan enters into the plan,
(a.1) another individual or another public primary caregiver who has before that time, under a written agreement, acquired a public primary caregiver’s rights as a subscriber under the plan,
(b) an individual who has before that time acquired a subscriber’s rights under the plan pursuant to a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the individual and a subscriber under the plan in settlement of rights arising out of, or on the breakdown of, their marriage or common-law partnership, or
(c) after the death of an individual described in any of paragraphs (a) to (b), any other person (including the estate of the deceased individual) who acquires the individual’s rights as a subscriber under the plan or who makes contributions into the plan in respect of a beneficiary
but does not include an individual or a public primary caregiver whose rights as a subscriber under the plan had, before that time, been acquired by an individual or public primary caregiver in the circumstances described in paragraph (a.1) or (b);
The definition of policyholder was added by the 1997 budget and applies to contracts concluded from 1998 onwards.
If your plan was an arrangement entered into on or after 1988, paragraph (c) of the definition of subscriber ensures that any person who acquires the deceased subscriber's rights becomes a subscriber after the death. If more than one person acquires the rights of the deceased subscriber, each of those persons becomes a subscriber after death. The question of whether a person acquires rights from the deceased subscriber can only be determined after considering all the relevant facts and documents, including the will of the deceased subscriber.
For plans that were established before the definition of "subscriber" in subsection 146.1(1) came into force, it is generally necessary to rely on the terms of the plan itself which, in some cases, specify who may be a subscriber to the plan.
As stated in Information Circular 70-6R5, this opinion is not an advance income tax ruling and is not binding.
Best regards,
Manager
Financial Sector and Exempt Entities Section
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch