5 October 2012 Roundtable, 2012-0453181C6 F - Person affiliated with RESP and RDSP -- summary under Paragraph 251.1(1)(g)

Is it the contributor to an RESP or instead the beneficiary who is affiliated with that plan, or potentially both? What about an RDSP?

CRA first noted that a trust and a majority-interest beneficiary are affiliated under s. 251.1(1)(g)(ii), that s. 251.1(3) provides that a beneficiary includes a person beneficially interested in the trust as broadly defined in s. 248(25), noted that s. 251.1(1)(g)(ii) provides that a person and a trust are affiliated if the person would be affiliated with a majority-interest beneficiary of the trust in the absence of paragraph 251.1(1)(g) (e.g., a spouse), that in light of s. 251.1(4)(d)(i) (respecting deemed exercise of discretion) a subscriber and a beneficiary of an RESP Trust could each be a majority-interest beneficiary of that trust and, thus, each affiliated with it per s. 251.1(1)(g)(i), and then stated:

In the case of a so-called family plan, that is, an RESP Trust allowing the subscriber, subject to certain conditions, to appoint more than one beneficiary, each beneficiary will generally be deemed to be a majority-interest beneficiary of the RESP Trust pursuant to subparagraph 251.1(4)(d)(i) and will generally be affiliated with the RESP Trust.

Similarly, any person that would be affiliated with a majority-interest beneficiary of an RESP Trust in the absence of paragraph 251.1(1)(g), should generally be affiliated with that RESP Trust. …

Finally, any person who would be affiliated with a majority-interest beneficiary in a particular RDSP Trust in the absence of paragraph 251.1(1)(g), should generally be affiliated with such trust.

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