Section 204.91 — Income Tax Act: Tax payable by subscribers

Every subscriber under a registered education savings plan shall pay a tax under this Part in respect of each month equal to 1% of the amount, if any, by which the total of all amounts each of which is the subscriber’s gross cumulative excess at the end of the month in respect of an individual exceeds the total of all amounts each of which is the portion of such an excess that has been withdrawn from a registered education savings plan before the end of the month. If a subscriber under a registered education savings plan would, but for this subsection, be required to pay a tax in respect of a month under subsection 204.91(1) in respect of an individual, the Minister may waive or cancel all or part of the tax where it is just and equitable to do so having regard to all the circumstances, including whether the tax arose as a consequence of reasonable error; whether, as a consequence of one or more transactions or events to which subsection 204.9(4) or 204.9(5) applies, the tax is excessive; and the extent to which further contributions could be made into registered education savings plans in respect of the individual before the end of the month without causing additional tax to be payable under this Part if this Part were read without reference to this subsection. If at any time an individual (in this subsection referred to as the “former subscriber”) ceases to be a subscriber under a registered education savings plan as a consequence of the settlement of rights arising out of, or on the breakdown of, the marriage or common-law partnership of the former subscriber and another individual (in this subsection referred to as the “current subscriber”) who is a subscriber under the plan immediately after that time, for the purpose of determining tax payable under this Part in respect of a month that ends after that time, each contribution made before that time into the plan by or on behalf of the former subscriber is deemed to have been made into the plan by the current subscriber and not by or on behalf of the former subscriber. For the purpose of applying this section where a subscriber has died, the subscriber’s estate is deemed to be the same person as, and a continuation of, the subscriber for each month that ends after the death.