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Effective July 1, 1999, individuals are allowed to withdraw, on a
tax-free basis up to $10,000 per year (maximum $20,000) for life long
learning. Similar to the Home Buyer's Plan, individuals must repay the
amount that they withdrew over a fixed period of time.
A maximum of $10,000 per year can be withdrawn from a RRSP by
individuals who are enrolled in full-time training or higher education
for at least three months during the year. Further withdrawals can be
made for a period of up to four years, but the total withdrawals cannot
exceed $20,000. Any contributions made within 90 days of a withdrawal
are not eligible for the withdrawal:
Amounts withdrawn are repayable in ten equal instalments. The first
repayment must be made at the earlier of:
- The year following the last year that the student was enrolled on
a full time basis, that is, where the student is not entitled to claim
full time attendance tax credits for at least three months in two
consecutive years;
- 60 days following the fifth year after the first withdrawal.
Repayments simply replenish the RRSP and are, therefore, not
deductible. Any missed repayments are included in income.
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