Comments on: The Life Long Learning Plan (LLP) http://blog.taxresource.ca/the-life-long-learning-plan-llp/ Canadian Tax Help & Financial Planning Resources Sun, 12 Feb 2012 02:53:18 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Tax Guyhttp://blog.taxresource.ca/the-life-long-learning-plan-llp/comment-page-1/#comment-10310 Tax Guy Fri, 18 Mar 2011 11:40:52 +0000 http://blog.taxresource.ca/?p=341#comment-10310 Andrew, Interesting thought. The concept behind the LLP is that you withdraw tax-free and repay the funds. The repayment is not a tax deduction but rather a replacement of the funds withdrawn. Effectively you get an interest free loan from your RRSP. You forego the investment income but you don't pay any interest on the loan.The comparison would have to be between what you forego in investment income versus the rate at which you would have borrow the same funds. Andrew,
Interesting thought. The concept behind the LLP is that you withdraw tax-free and repay the funds. The repayment is not a tax deduction but rather a replacement of the funds withdrawn. Effectively you get an interest free loan from your RRSP. You forego the investment income but you don’t pay any interest on the loan.

The comparison would have to be between what you forego in investment income versus the rate at which you would have borrow the same funds.

]]> By: Andrewhttp://blog.taxresource.ca/the-life-long-learning-plan-llp/comment-page-1/#comment-10299 Andrew Fri, 18 Mar 2011 00:21:31 +0000 http://blog.taxresource.ca/?p=341#comment-10299 One thing I have noticed about the LLP is that when you take the money out of your RRSP you generally have a lower income than when you pay the money back into your rrsp. Considering that you pay the marginal rate on the LLP repayments, Is the LLP actually a good idea from a tax efficiency stand-point. Are you really paying a higher interest rate as tax than you could have gotten by borrowing the money? Would you be better to borrow the money from someone instead of borrowing from your RRSP? One thing I have noticed about the LLP is that when you take the money out of your RRSP you generally have a lower income than when you pay the money back into your rrsp. Considering that you pay the marginal rate on the LLP repayments, Is the LLP actually a good idea from a tax efficiency stand-point. Are you really paying a higher interest rate as tax than you could have gotten by borrowing the money? Would you be better to borrow the money from someone instead of borrowing from your RRSP?

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