Chapter 9. Registered Education Savings Plan provider user guide – Registered Education Savings Plan transfers and the education savings incentives

From: Employment and Social Development Canada

Disclaimer: RESP promoters

The information contained on this page is technical in nature and is intended for Registered Education Savings Plan (RESP) and Canada Education Savings Program promoters. For general information, visit the RESP section.

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A PDF version of the Registered Education Savings Plan provider user guide is available on the index page.

List of acronyms

AIP
Accumulated income payment
BCTESG
British Columbia Training and Education Savings Grant
CESG
Canada Education Savings Grant
CESP
Canada Education Savings Program
CLB
Canada Learning Bond
CRA
Canada Revenue Agency
ESDC
Employment and Social Development Canada
ITA
Income Tax Act
ITS
Interface Transaction Standards
RESP
Registered Education Savings Plan
SAGES
Saskatchewan Advantage Grant for Education Savings

Introduction

When funds are transferred between Registered Education Savings Plans (RESPs) held within different financial institutions, the transferring and receiving RESP promoters must share information and work together to successfully complete the following Employment and Social Development Canada (ESDC) RESP Transfer form.

The RESP transfer form ESDC SDE 0100 includes 3 parts and 1 annex:

Promoters must also submit accurate transfer transactions to the Canada Education Savings Program (CESP) system of ESDC. In addition, when undertaking the transfer, certain conditions are required to ensure that the beneficiary continues to be eligible for the following incentives:

For more information, refer to Appendix C for a list of acronyms and terms used in this guide.

9.1. What is an RESP transfer and who is involved

Key concept: The term RESP transfer refers to the transactions that take place when all or parts of the funds in the plan are transferred from one RESP to another.

While the subscriber provides the information needed to facilitate the transfer and provides authorization by signing the required form, the RESP transfer process involves the cooperation of:

Each play a critical role in facilitating the RESP transfer process and confirming that it meets the conditions required to ensure that the beneficiary continues to be eligible for:

Synonyms for transferring and receiving, in this guide, “transferring RESP” means the plan from which funds are withdrawn in a transfer between RESPs, whereas “receiving RESP” means the plan in which these funds are deposited.

Other RESP documents may refer to transferring and receiving RESPs using different terms.

The following terms could replace “transferring”:

  • sending
  • relinquishing
  • originating
  • transferor

The following term could replace “receiving”:

  • transferee

9.1.1. Responsibilities of the RESP promoters

Participating RESP promoters must comply with the terms and conditions of the agreements signed with ESDC.

Under those agreements, RESP promoters must agree to track and report to the Minister of ESDC, all RESP financial activities in compliance with the CESP system Interface Transaction Standards (ITS). This includes transfer transactions that are reported in the record type (RT) 400 transaction. For more information, refer to Chapter 3. The Canada Education Savings Program system and Interface Transaction Standards.

With respect to RESP transfers, RESP promoter responsibilities include:

9.1.1.1. Responsibility for administering the incentives

Once the CESG, CLB and/or provincial incentives are paid into a RESP, the RESP promoter becomes responsible for administering these funds.

When incentives are transferred, the transferring and receiving RESP promoters must advise the CESP system of the transferred amount(s) of CESG, CLB and/or provincial incentives administered by ESDC. This is accomplished by completing the RESP transfer form and submitting the respective transactions to the CESP system according to ITS requirements.

9.1.2. Responsibilities of ESDC

The main responsibility of ESDC, relative to transfers, is to track the CESG, CLB and/or provincial incentives administered by ESDC by receiving and processing transfer transactions submitted to the CESP system by RESP promoters.

Via the CESP system, ESDC will:

Compliance reviews and the RESP transfer form, ESDC undertakes compliance reviews of the RESP promoters’ records and submission of information to the CESP system. This includes ensuring that the RESP transfer form has been properly completed, signed and maintained in a record‑keeping system.

9.2. RESP notional accounts – What they accomplish

RESP promoters must create and maintain separate RESP notional accounts to administer the CESG, CLB, and/or provincial incentives. These notional accounts identify the value of each monetary component of the RESP.

An RESP may be comprised of the following notional accounts:

Notional account balances entered onto the RESP transfer form must reflect the book value of RESP notional accounts.

When a financial transaction is processed in respect of a beneficiary, the funds are either deposited into or withdrawn from the appropriate RESP notional account depending on the purpose of the financial transaction. For example, contributions are deposited into the appropriate contribution notional account and the CESG (Basic and Additional) is deposited into the CESG notional account.

RESP notional accounts and the RESP transfer form, the transferring RESP promoter must enter the appropriate (book value) balances for each of the RESP notional accounts onto the RESP transfer form.

For more information, refer to Appendix D. Forms index – Education savings incentives, RESP transfer form (ESDC SDE 0100: Annex 1, Part A, Part B and Part C).

RESP promoters must calculate the proportion of CESG and provincial incentives transferred between RESPs.

Note: An example of how to perform this calculation is included in 9.4.1. Partial transfers, later in this chapter.

Note: In the case of a partial transfer, promoters must handle the CLB and the BCTESG separately.

9.3. Implications when transferring funds to another RESP

The RESP promoter must be aware of the various possible implications of making an RESP transfer and is responsible for communicating this information to the subscriber(s). These could include the following:

Note: RESP transfers are not permitted once an accumulated income payment (AIP) has been made from the transferring RESP. For more information, refer to Chapter 11. Options for assets remaining in the Registered Education Savings Plan.

9.3.1. Contribution history and potential tax penalties

Under the ITA, transfers of funds between RESPs are generally not restricted.

However, the Canada Revenue Agency (CRA) may consider contributions previously made to the transferring plan as contributions made to the receiving plan on the original contribution dates. This could result in over‑contributions and applicable tax penalties.

Unless the transfer meets one of the following conditions, the receiving plan will assume the contribution history of the transferring plan and may incur tax penalties:

Age limit for adding beneficiaries to family plans, beneficiaries must either be less than 21 years old when named to a family plan or they must have been beneficiaries under another family plan immediately before being added. For more information, refer to Chapter 4. Registered Education Savings Plans and 4.4.2. Family plans.

9.3.1.1. Determining if a transfer could have tax implications

Step 1: Subscriber requests RESP Transfer. Is there a common beneficiary in both plans?

Step 2: Does the receiving plan have a beneficiary who is a sibling of a beneficiary in the transferring plan?

Step 3: Is the receiving plan a family plan?

Step 4: Was the beneficiary in the receiving plan less than 21 years old when the receiving plan was entered into?

Beneficiary’s age when the receiving plan was entered into, if the receiving plan has already received a transfer from another RESP, the effective date of the receiving plan could be earlier than the date on which the subscriber actually opened this plan. After receiving a transfer, the effective date of the receiving plan (the date on which the plan is deemed to have been entered into) is the earliest effective date of the 2 plans involved in the transfer. For more information, refer to 9.3.8. Earliest effective date of the plan later in this chapter.

Failure to meet the above conditions may result in over‑contributions and may require the subscriber(s) to pay penalty taxes. For more information, refer to Chapter 4. Registered Education Savings Plans and 4.5. Over‑contributions.

It is important for the RESP promoter to communicate to the subscriber the possible consequences of transferring funds. A transfer that does not meet the conditions stipulated above may:

9.3.1.2. Example: Contribution history and potential tax penalties

Transferring plan – A:
Receiving plan – B:

The subscriber of plan A requested the transfer on January 21, 2011. Janet and Bob are siblings in the transferring and receiving plans. The receiving plan B was opened on January 10, 2011 when Bob was 30 years old. Bob was allowed to be named to the family plan B when he was older than 21 because he was already named in another family RESP at that time.

This transfer would not have tax implications because:

Determining if a transfer could have tax implications

Step 1: Subscriber requests RESP Transfer. Is there a common beneficiary in both plans?

  • If the answer is “No”:
    • go to step 2

Step 2: Does the receiving plan have a beneficiary who is a sibling of a beneficiary in the transferring plan?

  • If the answer is “Yes”:
    • go to step 3

Step 3: Is the receiving plan a family plan?

  • If the answer is “Yes”:
    • contribution history of the transferring plan will not be applied to the receiving plan and the transfer will not have tax implications

9.3.2. Transfer conditions for the education savings incentives

Transfers will be considered “ineligible” in respect of 1 or more education savings incentive(s) administered by ESDC unless the transfers comply with conditions stipulated in:

For an eligible transfer of all education savings incentives in a RESP:

When the receiving promoter does not offer an incentive, the receiving plan must support all of the conditions for receiving all of the incentives included in the RESP transfer. For example, a promoter must enter into an agreement with ESDC and pass industry testing before they can submit transactions for a particular incentive to the CESP system.

For additional information, refer to the following headings later in this chapter:

If an education savings incentive is transferred ineligibly, it must be repaid. For more information, refer to 9.3.3. Ineligible transfers and repayments later in this chapter.

Eligibility for the incentives and the RESP transfer form, both the transferring and receiving RESP promoters must be aware of the conditions affecting eligibility for the CESG, the CLB and/or provincial incentives administered by ESDC.

By reviewing the transfer eligibility information in the RESP transfer form the RESP promoter helps to ensure that the beneficiary continues to be eligible for the incentives for which they have already been qualified.

For more information, refer to Appendix D. Forms index – Education savings incentives, RESP transfer form (ESDC SDE 0100: Annex 1, Part A, Part B and Part C).

9.3.2.1. Conditions for an eligible transfer of the CESG

The following conditions must be satisfied for an eligible transfer of the CESG:

and

and

and

For more information, refer to 9.3.5. When the receiving promoter does not offer the Additional CESG, later in this chapter.

9.3.2.2. Determining if conditions for an eligible transfer of the CESG are satisfied

Step 1: Subscriber requests RESP Transfer. Is there a common beneficiary in both plans?

Step 2: Is the receiving plan an individual plan or a family plan with siblings only?

Step 3: Does the receiving plan have a beneficiary who is a sibling of a beneficiary in the transferring plan?

Step 4: Does the receiving plan comply with all conditions applicable to registering ESPs since January 1, 1999, as required by the Income Tax Act?

Step 5: Has Additional CESG been paid into the transferring plan?

Step 6: Is the receiving plan a family plan?

Step 7: Are all beneficiaries in the receiving plan siblings?

Step 8: Was the beneficiary in the receiving plan less than 21 years old when the receiving plan was entered into?

9.3.2.3. Example: Conditions for an eligible transfer of the CESG

Transferring plan – A:
Receiving plan – B:

The subscriber of plan A requested the transfer on September 15, 2011 when Joel was 30 years old. Maxim, Dianne and Joel are siblings and plan B was opened on January 10, 2005 when Joel was 24 years old.

Determining if conditions for an eligible transfer of the CESG are satisfied

Step 1: Subscriber requests RESP Transfer. Is there a common beneficiary in both plans?

  • If the answer is “No”:
    • go to step 2

Step 2: Does the receiving plan have a beneficiary who is a sibling of a beneficiary in the transferring plan?

  • If the answer is “Yes”:
    • go to step 3

Step 3: Is the receiving plan a family plan?

  • If the answer is “No”:
    • go to step 4

Step 4: Was the beneficiary in the receiving plan less than 21 years old when the receiving plan was entered into?

  • If the answer is “No”:
    • the transfer is ineligible

The transfer is ineligible for CESG because Joel was not less than 21 years old when plan B was entered into. The promoter must use January 10, 2005, plan B’s effective date prior to the transfer, to determine if Joel was less than 21 when this plan was entered into. For additional information, refer to 9.3.8. Earliest effective date of the plan later in this chapter.

As the transfer is ineligible, the lesser of plan A’s fair market value (FMV) and the incentive notional accounts (the CESG) of plan A must be repaid.

9.3.2.4. Example: Conditions for an eligible transfer of the basic CESG

Transferring plan – A:

Receiving plan – B:

The subscriber of plan A requested the transfer on January 21, 2011. Janet and Bob are siblings in the transferring and receiving plans. The receiving plan B was opened on January 10, 2011 when Bob was 30 years old. Bob was allowed to be named to the family plan B when he was older than 21 because he was already named in another family RESP at that time.

This in an eligible transfer for the Basic CESG.

Determining if conditions for an eligible transfer of the Basic CESG are satisfied

Step 1: Subscriber requests RESP Transfer. Is there a common beneficiary in both plans?

  • If the answer is “No”:
    • go to step 2

Step 2: Does the receiving plan have a beneficiary who is a sibling of a beneficiary in the transferring plan?

  • If the answer is “Yes”:
    • go to step 3

Step 3: Is the receiving plan a family plan?

  • If the answer is “Yes”:
    • go to step 4

Step 4: Are all beneficiaries in the receiving plan siblings?

  • If the answer is “No”:
    • go to step 5

Step 5: Has Additional CESG been paid into the transferring plan?

  • If the answer is “No”:
    • go to step 6

Step 6: Does the receiving plan comply with all conditions applicable to registering ESPs since January 1, 1999, as required by the Income Tax Act?

  • If the answer is “Yes”:
    • the transfer is eligible

9.3.2.5. Conditions for an eligible transfer of the CLB

The subscriber does not need to transfer the CLB in same proportion as each of the other notional accounts.

The following conditions must be satisfied for an eligible transfer of CLB:

For more information, refer to 9.3.6. When the receiving promoter does not offer the CLB, later in this chapter.

9.3.2.6. Determining if conditions for an eligible transfer of the CLB are satisfied

Step 1: Subscriber requests RESP Transfer. Is there a common beneficiary in both plans?

Step 2: Is the receiving plan an individual plan?

Step 3: Does the receiving plan comply with all conditions applicable to registering ESPs since January 1, 1999, as required by the Income Tax Act?

Step 4: Are all beneficiaries in the receiving plan siblings?

9.3.2.7. Example: Conditions for an eligible transfer of the CLB

Transferring plan – A:
Receiving plan – B:

The subscriber of plan A requested the transfer on September 7, 2011. This is not an eligible transfer for CLB because the receiving plan beneficiaries are not all siblings. Therefore, the lesser of plan A’s fair market value and the incentive notional account balances (the CESG and the CLB) in plan A must be repaid.

Determining if conditions for an eligible transfer of the CLB are satisfied

Step 1: Subscriber requests RESP Transfer. Is there a common beneficiary in both plans?

  • If the answer is “Yes”:
    • go to step 2

Step 2: Is the receiving plan an individual plan?

  • If the answer is “No”:
    • go to step 3

Step 3: Are all beneficiaries in the receiving plan siblings?

  • If the answer is “No”:
    • the transfer is ineligible

The CLB repayments do not affect the lifetime CLB entitlement of a beneficiary. Sarah could be named in another RESP after CLB amounts, paid to Sarah in plan A, are repaid to ESDC. Sarah could then receive her accumulated CLB entitlements in the new RESP and these entitlements would include any repaid CLB amounts.

The CLB could also be left in plan A in order to avoid an ineligible transfer. In that case, no repayment of the CESG or the CLB would be required. For additional information, refer to 9.4.1. Partial transfers later in this chapter.

9.3.2.8. Conditions for an eligible transfer of the SAGES

The following conditions must be satisfied for an eligible transfer of the SAGES:

and

and

and

9.3.2.9. Determining if conditions for an eligible transfer of the SAGES are satisfied

Step 1: Subscriber requests RESP Transfer. Is there a common beneficiary in both plans?

Step 2: Is the receiving plan a family plan?

Step 3: Does the receiving plan have a beneficiary who is a sibling of a beneficiary in the transferring plan?

Step 4: Are all beneficiaries in the receiving plan siblings?

Step 5: Was the beneficiary in the receiving plan less than 21 years old when the receiving plan was entered into?

Step 6: Does the receiving plan promoter offer SAGES?

Step 7: Does the receiving plan comply with all conditions applicable to registering ESPs since January 1, 1999, as required by the Income Tax Act?

9.3.2.10. Example: Conditions for an eligible transfer of the SAGES

Transferring plan – A:
Receiving plan – B:

The subscriber of plan A requested the transfer on January 23, 2014. Jacob, Debrah and Ryan are siblings. Plan B was opened on August 10, 2013 when Ryan was 16 years old.

Determining if conditions for an eligible transfer of the SAGES are satisfied

Step 1: Subscriber requests RESP Transfer. Is there a common beneficiary in both plans?

  • If the answer is “No”:
    • go to step 2

Step 2: Does the receiving plan have a beneficiary who is a sibling of a beneficiary in the transferring plan?

  • If the answer is “Yes”:
    • go to step 3

Step 3: Is the receiving plan a family plan?

  • If the answer is “No”:
    • go to step 4

Step 4: Was the beneficiary in the receiving plan less than 21 years old when the receiving plan was entered into?

  • If the answer is “Yes”:
    • go to step 5

Step 5: Does the receiving plan promoter offer SAGES?

  • If the answer is “Yes”:
    • go to step 6

Step 6: Does the receiving plan comply with all conditions applicable to registering ESPs since January 1, 1999, as required by the Income Tax Act?

  • If the answer is “Yes”:
    • the transfer is eligible

This transfer is eligible for the SAGES because Ryan is a sibling of a beneficiary in the transferring plan and he was less than 21 years old when plan B was entered into.

9.3.2.11. Conditions for an eligible transfer of the BCTESG

The subscriber does not need to transfer the BCTESG in same proportion as each of the other notional accounts.

The following conditions must be satisfied for an eligible transfer of BCTESG:

and

and

and

For more information, refer to 9.3.7. When the receiving promoter does not offer the BCTESG, later in this chapter.

9.3.2.12. Determining if conditions for an eligible transfer of the BCTESG are satisfied

Step 1: Subscriber requests RESP Transfer. Is there a common beneficiary in both plans?

Step 2: Is the receiving plan a family plan?

Step 3: Does the receiving plan have a beneficiary who is a sibling of a beneficiary in the transferring plan?

Step 4: Are all beneficiaries in the receiving plan siblings?

Step 5: Was the beneficiary in the receiving plan less than 21 years old when the receiving plan was entered into?

Step 6: Does the receiving plan promoter offer BCTESG?

Step 7: Does the receiving plan comply with all conditions applicable to registering ESPs since January 1, 1999, as required by the Income Tax Act?

9.3.2.13. Example: Conditions for an eligible transfer of the BCTESG

Transferring plan – A:
Receiving plan – B:

The subscriber of plan A requested the transfer on November 16, 2015. Jordan, Jessica and Rodney are siblings. Plan B was opened on January 10, 2013 when Rodney was 19 years old.

Determining if conditions for an eligible transfer of the BCTESG are satisfied

Step 1: Subscriber requests RESP Transfer. Is there a common beneficiary in both plans?

  • If the answer is “No”:
    • go to step 2

Step 2: Does the receiving plan have a beneficiary who is a sibling of a beneficiary in the transferring plan?

  • If the answer is “Yes”:
    • go to step 3

Step 3: Is the receiving plan a family plan?

  • If the answer is “No”:
    • go to step 4

Step 4: Was the beneficiary in the receiving plan less than 21 years old when the receiving plan was entered into?

  • If the answer is “Yes”:
    • go to step 5

Step 5: Does the receiving plan promoter offer BCTESG?

  • If the answer is “Yes”:
    • go to step 6

Step 6: Does the receiving plan comply with all conditions applicable to registering ESPs since January 1, 1999, as required by the Income Tax Act?

  • If the answer is “Yes”:
    • the transfer is eligible

This transfer is eligible for the BCTESG because Rodney is a sibling of a beneficiary in the transferring plan and he was less than 21 years old when plan B was entered into.

9.3.3. Ineligible transfers and repayments

If the conditions for an eligible transfer are not satisfied and the transfer is allowed to occur, the transferring promoter must repay the lesser of the following amounts to ESDC:

Where:

You can find the formula in the Canada Education Savings Regulations 11(4) (b).

Note: It may be possible to repay only the incentives that do not satisfy all conditions for an eligible transfer under the pre‑transfer repayment policy. For more information, refer to 9.3.4. Making pre‑transfer repayments to avoid ineligible transfers later in this chapter.

Submitting repayment transactions for ineligible transfers, when submitting repayment information to ESDC, RESP promoters must submit the following transaction to the CESP system:

  • RT 400, transaction type 21 (grant repayment)

For a repayment due to an ineligible transfer, this transaction will:

  • identify the repayment reason as 04 (ineligible transfer), and
  • report the amount of each incentive to be repaid due to the ineligible transfer

Repayment amounts reported to ESDC for a particular promoter are subtracted from the total amount of incentives that ESDC would otherwise pay to the promoter each month. For more information, refer to Chapter 3. The Canada Education Savings Program system and Interface Transaction Standards.

Example: Ineligible transfers and repayments

A subscriber initiated an RESP transfer in order to invest the funds with another RESP promoter. However, when the transfer form was completed, it was determined that this transfer would not satisfy the conditions for an eligible transfer. Even after being advised of the consequences by the transferring promoter, the subscriber decided to continue with the transfer. The transferring promoter must submit the required repayment transaction for this ineligible transfer to the CESP system.

9.3.4. Making pre‑transfer repayments to avoid ineligible transfers

Under the pre‑transfer repayment policy, only the incentives that do not satisfy all conditions for an eligible transfer must be repaid prior to the transfer, and therefore allows the remaining eligible incentives to be transferred.

In a situation where the BCTESG is the incentive that does not satisfy all conditions for an eligible transfer, it can also remain behind in the relinquishing RESP, refer to 9.3.7. When the receiving promoter does not offer the BCTESG later in this chapter.

The repayment of the CESG, the SAGES and/or the BCTESG will result in the loss of the beneficiary’s grant room, which cannot be restored.

For example, the transferring RESP may have already received SAGES payments. If the receiving promoter does not offer SAGES, the transfer would be ineligible if it included SAGES amounts. To avoid an ineligible transfer to the receiving promoter, the transferring promoter must repay the balance of the SAGES notional account prior to the transfer. This would allow for the eligible transfer of the remaining funds. For more information, refer to 9.3.4.4. Pre‑transfer repayment example later in this chapter.

If the receiving promoter does not offer the Additional CESG, the CLB or the BCTESG, for additional information, refer to the following headings later in this chapter:

9.3.4.1. Pre‑transfer repayment process

The transferring promoter must follow these 3 steps to complete the pre‑transfer repayment(s):

  1. confirm the transfer eligibility information provided by the receiving promoter
  2. repay the incentive(s) which would otherwise cause a transfer to be ineligible
  3. report the repayment of the ineligible incentive(s) using repayment reason 04 (ineligible transfer)

Once these steps are complete, the transferring promoter may then continue with the transfer of the remaining assets in the RESP as per the usual transfer process.

9.3.4.2. Pending grant

Before completing a transfer, there may be pending applications for incentives that would result in an ineligible transfer. If such an incentive is paid into the transferring RESP after the transfer has been completed, it must be repaid using repayment reason 04 (ineligible transfer).

Subsequent payments for pending applications of eligible incentives should be processed normally. For more information, refer to 9.3.4.4. Pre‑transfer repayment example and 9.6.3. When there is a pending incentive later in this chapter.

For information about pending application(s), refer to the RESP Transfer form, Part C. The relinquishing promoter must complete sections 6 and 8 of this form. For more information, refer to 9.5.1. Form overview later in this chapter.

9.3.4.3. Partial transfers

Subscribers must transfer the same proportion from each of the notional account balances (the assisted contributions, unassisted contributions, the CESG and accumulated incomes), with the exception of the CLB and the BCTESG.

Subscribers can choose to transfer all, some or none of the CLB and the BCTESG.

The entire notional account balance of an ineligible incentive must be repaid prior to either a full or a partial transfer.

9.3.4.4. Pre‑transfer repayment example

A subscriber would like to transfer 50% of the assets (excluding the CLB) from a family RESP administered by promoter A to a new family RESP that is administered by promoter B. The transferring promoter A offers the CESG (Basic and Additional), the CLB and the SAGES whereas the receiving promoter B offers only the Basic CESG.

At the time of the transfer request, the transferring RESP had a fair market value of $1,700. There were also pending applications for the CESG and the SAGES as a result of a recent $100 contribution that was not yet processed by the CESP system. The transferring RESP had the following notional account balances at the time of the transfer request.

Table 1: Notional account balances at the time of the transfer request
Transferring RESP notional accounts Notional account balances at the time of the transfer request
Assisted contributions $500
Unassisted contributions $100 (pending receipt of grant)
CESG (Basic and Additional) $200
CLB $500
SAGES $50
Earnings $350

While promoter B does not offer the SAGES, the CLB or the Additional CESG, this promoter agreed to administer the rules for the Additional CESG and could therefore accept a transfer that included the Additional CESG amounts. However, the partial transfer could not include either the SAGES or the CLB. To satisfy the proportional transfer rule and the required conditions for an eligible transfer, promoter A submitted a repayment transaction to the CESP system to repay the entire SAGES notional account balance ($50) even though the subscriber had requested a partial transfer. Promoter A also retained the entire CLB balance ($500) to avoid an ineligible transfer.

After promoter A entered the required $50 SAGES pre‑transfer repayment transaction into their system, the RESP had a fair market value of $1,650 and the following notional account balances.

Table 2: Notional account balances after the SAGES pre‑transfer repayment
Transferring RESP notional accounts Notional account balances after the SAGES pre‑transfer repayment
Assisted contributions $500
Unassisted contributions $100 (pending receipt of grant)
CESG $200
CLB $500
SAGES $0
Earnings $350

Promoter A and B collaborated to complete the transfer form, Part A, Part B and Part C and transferred the following amounts (50% partial transfer excluding CLB) to promoter B using the normal transfer process.

Table 3: Amount transferred (50%)
Notional account Amount transferred (50%)
Assisted contributions $250
Unassisted contributions $50 (pending receipt of grant)
CESG $100
Earnings $175

Promoter A indicated on the transfer form, Part C (relinquishing promoter) that there was a pending application for the CESG at the time of the transfer.

In the month following the transfer, promoter A received a payment of $40 in CESG ($20 of the Basic CESG and $20 of the Additional CESG) as a result of the pending CESG application. A payment of $10 in SAGES was also made to the RESP with promoter A as a result of the same $100 contribution. Since the new SAGES payment with promoter A would have resulted in an ineligible transfer, promoter A repaid the entire $10 SAGES amount (repayment transaction 400‑21 using repayment reason 04). Also, since the new CESG payment with promoter A would not have resulted in an ineligible transfer, promoter A initiated the normal transfer process to transfer 50% of the pending grant amount ($20 in CESG to promoter B).

Promoter A amended the original transfer form, Part C (or alternatively, fully completed pages 1 and 3 of a new transfer form Part C) and sent a new copy to promoter B. This transfer form, Part C indicated that $20 in CESG was transferred as a result of the pending CESG application that existed prior to the original transfer. Since promoters A and B must update the assisted and unassisted contribution notional account balances in their systems to take the new CESG payment into account, the transfer form, Part C must also indicate that $50 of unassisted contributions in the original transfer should now be considered assisted contributions in the receiving RESP.

Both promoters A and B submitted new transfer transactions to the CESP system to report the transfer of $20 that was paid for the pending CESG application.

9.3.5. When the receiving promoter does not offer the Additional CESG

If the receiving promoter does not offer the Additional CESG and the transferring RESP has received the Additional CESG, for the transfer to be eligible, the receiving promoter must agree to ensure that:

Refusing to administer the rules of the Additional CESG, if the receiving promoter does not offer the Additional CESG and refuses to administer the above rules, the relinquishing promoter repays the entire CESG balance (Basic and Additional CESG combined) in a pre‑transfer repayment to avoid an ineligible transfer. For additional information, refer to 9.3.4. Making pre‑transfer repayments to avoid ineligible transfers earlier in this chapter.

Adding a beneficiary to a siblings‑only plan after an eligible transfer, if an eligible transfer included Additional CESG from the transferring plan and, afterwards, a beneficiary who is not a sibling is added to the receiving plan, the lesser of the following amounts must be repaid to ESDC:

  1. the balance of the CESG notional account (Basic and Additional CESG combined) of the receiving RESP immediately before the individual becomes a beneficiary, and
  2. the fair market value of the property held in connection with the receiving RESP immediately before the individual becomes a beneficiary

Example: When the receiving promoter does not offer the Additional CESG

A subscriber initiated a transfer from an individual RESP “A” that had already received $100 in Additional CESG payments (but no other incentives), to a family RESP “B” administered by another promoter. While the receiving promoter of RESP “B” does not offer the Additional CESG, all conditions for an eligible transfer were satisfied at the time of the transfer.

2 years after the transfer, the subscriber named another beneficiary to RESP “B”. However, the new beneficiary was not a sibling of the other beneficiaries.

Immediately before adding the new beneficiary, RESP “B” had a:

Now that all beneficiaries in RESP “B” are no longer siblings, $1,000 (the lesser of $1,000 and $15,875) must be repaid to ESDC.

Submitting the repayment transaction to the CESP system, in the above example, the promoter would submit a transaction to the CESP system with the following information:

  • record type 400, transaction type 21 (grant repayment)
  • repayment reason = 08 (ceases to meet sibling only condition)
  • grant amount = $1,000 (CESG amount to repay)

Repayment amounts reported to the CESP system for a particular promoter are subtracted from the total amount of incentives that the CESP system would otherwise pay to the promoter each month. For more information, refer to Chapter 3. The Canada Education Savings Program system and Interface Transaction Standards.

9.3.6. When the receiving promoter does not offer the CLB

A transfer is ineligible if it includes the CLB amounts and the receiving RESP promoter does not offer the CLB. If such a transfer is allowed to occur, the lesser of the following amounts must be repaid to ESDC:

Where:

You can find the formula in the Canada Education Savings Regulations 11(4) (b).

Impact of the CLB repayments on lifetime CLB entitlements, repayment of the CLB is not like a repayment of other incentives because it does not affect the lifetime CLB entitlement for a beneficiary. A beneficiary could be named in a different RESP to receive any CLB amounts that had been repaid from that beneficiary’s CLB notional accounts in other RESPs.

To avoid repaying all incentives due to an ineligible transfer of the CLB, a subscriber could choose to exclude the CLB amounts in a transfer.

Subscribers can transfer all, part or none of the CLB, transfer of CLB is not like the transfer of other incentives because subscribers can choose to transfer all, part or none of the CLB.

Example: When the receiving promoter does not offer the CLB

A subscriber requested a transfer from Maxim’s individual RESP “A” with a fair market value of $1,285, which included $800 in CLB and $200 in CESG. The receiving RESP “B” (for Maxim and his sister Sarah) is administered by another promoter that does not offer CLB.

The transfer would be ineligible if Maxim’s CLB was included in the transfer to RESP “B” because this promoter does not offer CLB. In this case, $1,000 (the combined value of the CESG and the CLB notional account balances in RESP “A”) is less than $1,285 (the fair market value of RESP “A”). Therefore, $1,000 would have to be repaid. The $800 of CLB repayments could be eventually paid back into another RESP for Maxim. However, the $200 CESG repayment would reduce Maxim’s lifetime CESG limit from $7,200 to $7,000.

To avoid an ineligible transfer that results in incentive repayments, the subscriber could choose to exclude the $800 CLB amount and transfer only $200 in CESG to RESP “B”. There were 2 options for the remaining $800 in CLB. It could be left in the original RESP “A” or transferred at a later date to another RESP for Maxim, that offers CLB.

9.3.7. When the receiving promoter does not offer the BCTESG

Effective June 15, 2020, a new policy was implemented that provides additional flexibility to subscribers by removing the requirement to transfer amounts of the BCTESG in the same proportion as other property in the RESP that is required to be proportionally transferred. Therefore, if the receiving promoter does not offer the BCTESG, the BCTESG can remain behind in the sending RESP.

This means that the promoter does not need to repay the BCTESG in order to proceed with the transfer of the remaining incentives. A repayment of the BCTESG will result in the loss of the beneficiary’s BCTESG grant room, which cannot be restored.

Subscribers can transfer all, part or none of the BCTESG, transfer of the BCTESG is not like the transfer of other incentives because subscribers can choose to transfer all, part or none of the BCTESG.

9.3.8. Earliest effective date of the plan

According to the ITA, after an RESP transfer occurs, the earliest effective date of the 2 plans must be used to determine the following for the receiving plan:

Example: Earliest effective date of the plan

Transferring plan “A” effective date: March 15, 2004

Receiving plan “B” effective date: April 30, 2005

After the transfer: plan A to plan B

Use March 15, 2004 as the effective date to determine the dates (for plan B) when:

Beneficiary’s age when the receiving plan was entered into, one eligibility criterion for transfers to an individual plan is the age of a sibling in the receiving plan when the receiving plan was entered into. For an example, refer to 9.3.2.1. Conditions for an eligible transfer of the CESG earlier in this chapter.

If no previous transfers have been made into the receiving plan:

  • use the date the receiving plan was actually opened to determine how old the beneficiary was when the receiving plan was entered into

If the receiving plan has already received a transfer from another plan:

  • use the earliest effective date of the receiving plan prior to the next transfer, to determine the beneficiary’s age when the receiving plan was entered into

Example: Earliest effective date of the plan

The following table lists the dates on which subscribers actually signed 3 new RESP contracts.

Table 4: Earliest effective date of the plan
RESP Type Opening date on signed contract
A Family April 2, 1998
B Individual January 10, 2005
C Individual August 4, 2004

Transfer from A to B

On November 1, 2011, there was a transfer from RESP A to RESP B.

To determine if the sibling in plan B was less than 21 years old when plan B was entered into, the promoter must use the effective date of plan B prior to the transfer. For an eligible transfer from A to B, the sibling would have to have been less than 21 years old on January 10, 2005.

After the transfer from RESP A to RESP B, April 2, 1998 becomes the effective date of plan B because this is earlier than the actual date on which plan B was opened. After this transfer, April 2, 1998 would be used to determine:

Transfer from C to B

On November 30, 2011, there was a transfer into plan B from plan C.

However, as there was a previous transfer into plan B, the effective date of plan B prior to the transfer from plan C was April 2, 1998. For an eligible transfer from C to B, the beneficiary would have to have been less than 21 years old on April 2, 1998.

After this transfer, the effective date of plan B would remain at April 2, 1998, because this date is earlier than the effective date of plan C.

9.4. Types of transfers

If the terms of a subscriber’s contract allow for it, a subscriber can choose to make a full or partial transfer of the property in the RESP. The type of transfer will determine how the RESP promoters will manage the funds in each education incentives notional account (the CESG, the CLB, and provincial incentives notional accounts). In the case of a full transfer:

9.4.1. Partial transfers

If only a portion of the property in the RESP is transferred, then:

The CLB and the BCTESG must be isolated if included in a partial transfer, the subscriber can choose to transfer all, part, or none of the CLB and the BCTESG when making a partial transfer. The CLB and the BCTESG do not have to be transferred in the same proportions as other assets in the plan. The CLB and the BCTESG are excluded when calculating the market value of the RESP to determine proportions.

9.4.1.1. Step 1 – Determining the proportion of amounts to be transferred

In many cases, RESP promoters’ systems are set up to automatically calculate the proportion of contributions, earnings, CESG, and/or provincial incentives that will be included in a partial transfer.

However, it is helpful to understand the process for determining the correct proportion of the CESG and provincial incentives notional accounts that must be transferred, as follows:

  1. determine the market value of the plan
  2. calculate what percentage of the plan’s market value is represented by the requested transfer amount, using the following formula

Requested transfer amount / RESP market value = Proportional percentage

For example, if the subscriber wishes to transfer $1,950 to another RESP and the current RESP market value is $7,500, then the above equation would be populated as follows.

$1,950 / $7,500 = 26%

In this example, the requested transfer amount of $1,950 represents 26% of the plan’s current value.

  1. apply this percentage (or proportion) to each notional account in the RESP (except the CLB and the BCTESG notional accounts)

Remember: The CLB and the BCTESG are not included when calculating market value of the RESP when determining proportions to be transferred.

When monies are transferred from 1 RESP to another, the transferring RESP promoter must debit out the amounts from the notional accounts in the transferring RESP.

The RESP promoter of the receiving plan must then ensure that the monies are credited into the corresponding notional accounts in the receiving RESP. This maintains the integrity of the balances in all notional accounts for both RESPs. For more information, refer to 9.7. An overview of the transfer process, at the end of this chapter.

9.4.1.2. Step 2 – Calculating the proportion of the CESG and the SAGES

Based on the previous example, note how the proportion of the CESG and the SAGES to be transferred is determined.

Calculating the CESG and the SAGES proportions, in this example, the notional accounts in the transferring RESP look like this:

  • RESP market value: $7,500
  • earnings: $1,150
  • contributions: $4,500
  • SAGES: $500
  • CLB: $0
  • CESG: $1,350
  • requested partial transfer amount: $1,950
  • proportion of RESP: $1,950 / $7,500 = 26%

The transferring RESP promoter must use this percentage (26%) to calculate the value of each notional account held in the RESP:

  • earnings × 26% = $299
  • contributions × 26% = $1,170
  • SAGES × 26% = $130
  • CESG × 26% = $351
  • total amount of transfer = $1,950

The transferring RESP promoter will transfer $1,950 to the receiving RESP promoter identified by the subscriber.

Populating proportional amounts onto the RESP transfer form, based on the above example the following amounts would be entered onto the RESP transfer form.

Account balances and market value:

  • unassisted contributions: $0
  • assisted contributions: $1,170
  • CESG: $351
  • SAGES: $130
  • CLB: $0
  • earnings: $299
  • total market value: $1,950

Remember: While the amount of CESG and the SAGES will be in proportion to the total value of funds transferred, the CLB is accounted for separately. The subscriber can choose to transfer all, part or none of the CLB at the time of the transfer. If they do transfer the CLB, it must be attributed to the beneficiary for whom it was directed and meet specific conditions governing its transfer.

For more information, refer to 9.3. Implications when transferring funds to another RESP, 9.3.2. Transfer conditions for the education savings incentives and Chapter 6. The Canada Learning Bond.

9.4.1.3. Example of a partial transfer – When there is a loss in the plan

In the following example, the book value of the plan is $2,000. However, the plan has suffered a loss of $400 and there are no earnings in the plan. Therefore, based on the notional account balances, and taking into account the $400 loss, the market value of the plan is $1,600.

Calculating the CESG and the SAGES proportions, in this example, the notional accounts in the transferring RESP look like this:

  • RESP market value: $1,600
  • earnings: $(400)
  • contributions: $1,000
  • SAGES: $0
  • CLB: $500
  • CESG: $500
  • requested partial transfer amount: $800 (of the market value)
  • proportion of RESP: $800 / $1,100 = 72.727%

Note: The CLB of $500 is not included when calculating the market value to determine its proportion with relation to the RESP. Therefore, the denominator of $1,100 above reflects the RESP market value of $1,600 less $500 (which is $1,100).

The transferring RESP promoter must use this percentage (72.727%) to calculate the value of each notional account held in the RESP:

  • earnings = $0
  • contributions × 72.727% = $727.27
  • CESG × 72.727% = $363.63
  • total book value of transfer = $1,090.90
  • total market value of Transfer = $800.00
  • (loss) of $400 × 72.727% = $290.90

Note: The difference between the RESP book value of the transfer ($1,090.90) and the market value of the requested transfer ($800) is $290.90. This is equal to 72.727% of the $400 loss. Therefore, the loss is accommodated in the transfer.

Populating proportional amounts onto the RESP transfer form, based on the above example the following amounts would be entered on the RESP transfer form.

Notional account balances and market value:

  • unassisted contributions: $0
  • assisted contributions: $727.27
  • CESG: $363.63
  • SAGES: $0
  • CLB: $0
  • earnings: $0
  • total market value: $800

Remember: While the amount of CESG and the SAGES will be in proportion to the total value of funds transferred, the CLB is accounted for separately. The subscriber can choose to transfer all, part or none of the CLB at the time of the transfer. If they do transfer the CLB, it must be attributed to the beneficiary for whom it was directed and meet specific conditions governing its transfer.

For more information, refer to 9.3. Implications when transferring funds to another RESP, 9.3.2. Transfer conditions for the education savings incentives and Chapter 6. The Canada Learning Bond.

9.4.1.4. Partial transfers subject to transfer conditions

Partial transfers are subject to the same transfer conditions as full transfers. The RESP transfer must comply with all conditions applicable to the CESG, CLB and/or provincial incentives to ensure it is an “eligible” transfer with respect to the incentive.

Confirm the transfer meets all transfer conditions, if 1 or more of the education savings incentives (the CESG, the CLB and/or provincial incentives administered by ESDC) held in the relinquishing RESP cannot be transferred, the education savings incentive that makes the transfer ineligible must be repaid in full prior to the transfer, regardless if it is a full or partial transfer.

For more detailed information, refer to the following sections:

9.5. Transfer form

It is mandatory to complete the transfer form (SDE 0100) to facilitate external transfers (transfers that occur between RESPs held by different RESP promoters that use different business numbers).

The use of the transfer form is no longer compulsory for internal transfers (transfers that occur between RESPs held by the same RESP promoter using the same business number). Promoters may facilitate internal transfers using their own methodology.

As with external transfers, the processing of internal transfers must be verifiable for the purpose of compliance reviews. Promoters that choose to facilitate internal transfers without using the ESDC transfer form will still be required to show that transfer eligibility was confirmed prior to processing and that RESP notional balances were transferred and distributed appropriately between receiving and relinquishing RESPs.

The transfer form is used to:

Subscribers and promoters work together to complete the transfer form and process transfer requests.

9.5.1. Form overview

The following 3 main parts of the transfer form must be completed for each RESP transfer:

Reminder: It is mandatory to complete the transfer form (SDE 0100) to facilitate external transfers.

Annex 1: Additional beneficiaries

For more than 3 beneficiaries, each promoter is to complete their respective copy of the Annex 1: Additional beneficiaries

You can download all of these components of the transfer form from the “Forms” tab of the Canada.ca/RESPresources Web page.

A transfer can proceed only after all of the following 3 main parts of the transfer form have been completed by the appropriate parties:

The process begins when the subscriber completes Part A. The transferring and receiving promoters must collaborate to complete Part B and C and they must also share all completed parts of the transfer form.

9.5.2. Once the form has been completed

Once the RESP Transfer Form is completed by both the receiving and transferring RESP promoters, they must enter the information into their respective electronic systems based on their internal procedures. This information must then be sent to the CESP system via the RT 400 financial transaction. For more information, refer to Chapter 3. The Canada Education Savings Program system and Interface Transaction Standards and 3.5.11. Contract transfers (400‑19 and 400‑23).

9.6. Guidelines for successful transfers

The following checklist is designed to help each RESP promoter take the necessary steps to ensure a successful transfer process.

Promoters are required to:

For more information, refer to Chapter 3. The Canada Education Savings Program system and Interface Transaction Standards.

9.6.1. Mandatory fields and ITS requirements

When information is submitted electronically to the CESP system, each information element must conform to the ITS (example: its format, type, and number of characters per field).

All RESP promoters are responsible for ensuring that the information collected on the RESP transfer form is accurate and compliant with ITS requirements.

9.6.2. Transfer transaction types

Each RESP promoter must submit transfer transactions to the CESP system. These transactions are reported in the RT 400 record; however, each RESP promoter must submit a specific transaction type. This will indicate the transfer out and transfer in information.

9.6.3. When there is a pending incentive

When submitting transfer transactions (RT 400) to the CESP system, both the transferring and receiving promoters must submit accurate amounts for all incentives being transferred. Information for a particular transfer can be submitted in a single transaction or in multiple transactions.

If there are pending incentive payments when the transfer is initiated, the transferring and receiving promoters must collaborate to ensure that complete and accurate information is submitted to the CESP system once these pending incentives have been paid.

The transferring promoter remains responsible for administering the pending incentives paid into the RESP in respect of a beneficiary until this information has been successfully submitted to the CESP system in a transfer transaction.

9.6.4. Processing transfer transactions

The CESP system generates and sends 2 types of transaction reports to the RESP promoters’ Head Office at the end of each processing run (monthly). These reports are designed to verify the status of all the transfer transactions submitted to the CESP by RESP promoters and include:

9.6.4.1. Processed transfer transactions

Processed transfer transactions are included in the transaction processing report. This acknowledges that the transaction has passed all formatting and business rules.

9.6.4.2. Rejected transfer transactions

Rejected transfer transactions are included in the transaction error report at the end of every monthly production run. This error report will include notice that validation has failed or information submitted is missing, incorrect, or incorrectly formatted. The rejected transaction must be corrected and resubmitted.

For more information about CESP system record types and error codes, refer to Chapter 3. The Canada Education Savings Program system and Interface Transaction Standards.

9.7. An overview of the transfer process

The following represents an overview of the steps required to transfer RESP funds, along with related responsibilities.

To undertake the RESP transfer process:

  1. the subscriber requests the RESP promoter to transfer RESP funds, identifying:
    • the amount to be transferred, and
    • the name of the receiving financial institution (receiving RESP promoter)
  2. the transferring promoter confirms that an AIP has not been made from the RESP

Note: RESP property cannot be transferred if an AIP has been made.

  1. the transferring promoter confirms the conditions for an “eligible” transfer of education savings incentives with the subscriber. For more information, refer to 9.3. Implications when transferring funds to another RESP and 9.3.2. Transfer conditions for the education savings incentives earlier in this chapter
  2. if it is a partial transfer, the transferring promoter undertakes the calculations required to determine the proportion of the contributions, the earnings, the CESG and/or provincial incentives to be transferred. For more information, refer to 9.4.1. Partial transfers earlier in this chapter

Note: The CLB and the BCTESG are not included in this calculation to determine the proportion to be transferred. The subscriber will identify the amount of the CLB and the BCTESG to be transferred for each specific beneficiary, if any.

  1. the subscriber(s) and the RESP promoter gathers and/or provides the information necessary to transfer the funds and complete the RESP transfer form (HRSDC SDE 0100 Part A, Part B and Part C). For more information, refer to 9.5. Transfer form earlier in this chapter.
  2. the RESP promoters obtain all of the required signatures on the transfer form. It is suggested that the form be completed and signed in duplicate
  3. the RESP promoters retain the signed versions of the RESP transfer form and file according to the organization’s record keeping procedures
  4. the RESP promoters submit transfer transactions electronically to the CESP system:
    • transfer out transaction: RT 400‑23
    • transfer in transaction: RT 400‑19

For more information, refer to 9.6. Guidelines for successful transfers earlier in this chapter.

Reporting periods, generally, reporting periods extend from the first to the last day of the same month. The RESP promoter has 4 business days after the end of the reporting period to send files for processing by the CESP system. Any transactions which occurred after the last day of the reporting period cannot be included.

  1. the CESP system accepts and processes transfer transactions from RESP promoters. For more information, refer to 6. Guidelines for successful transfers and 9.6.4. Processing transfer transactions earlier in this chapter

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