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

On this page

• List of acronyms
• Introduction
• 9.1. What is an RESP transfer and who is involved
• 9.2. RESP notional accounts – What they accomplish
• 9.3. Implications when transferring funds to another RESP
• 9.4. Types of transfers
• 9.5. Transfer form
• 9.6. Guidelines for successful transfers
• 9.7. An overview of the transfer process

Alternate format

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

ESP

Education savings plans

ITA

Income Tax Act

ITS

Interface Transaction Standards

QESI

Quebec Education Savings Incentive

RESP

Registered Education Savings Plan

RT

Record Type

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. They need to 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:

• Part A: subscriber request
• Part B: receiving promoter
• Part C: relinquishing promoter
• Annex 1: additional beneficiaries

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:

• Canada Education Savings Grant (CESG)
• Canada Learning Bond (CLB)
• British Columbia Training and Education Savings Grant (BCTESG)

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:

• the transferring RESP promoter, who transfers funds from the transferring plan to the receiving plan
• the receiving RESP promoter, who ensures funds are deposited into the corresponding notional accounts in the receiving plan, and
• ESDC

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:

• the CESG
• the CLB, and/or
• the BCTESG

9.1.1. Responsibilities of the RESP promoters

Participating RESP promoters must follow 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:

• understanding the conditions for an “eligible” transfer with respect to the CESG, the CLB and the BCTESG and communicating this information to the subscriber
• completing the applicable RESP transfer form (ESDC SDE 0100: Annex 1, Part A, Part B and Part C) each time a transfer occurs, using information provided by the subscriber
• sharing information with other RESP promoters to successfully complete the transfer form as well as the transfer transaction. This represents a critical part of the transfer process. Accurately completing the RESP transfer form requires each RESP promoter to provide information, as authorized by the subscriber. Accurate and timely transfer transactions also ensure beneficiaries continue to be eligible for and receive the incentives for which they qualify
• submitting transfer transactions to the CESP system promptly and in compliance with ITS requirements
• continuing to administer the RESP as required under the Income Tax Act (ITA), and
• administering and accounting for the CESG, CLB and/or BCTESG that has been received

9.1.1.1. Responsibility for administering the incentives

Once the CESG, the CLB and/or the BCTESG is paid into an 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, the CLB and/or the BCTESG. 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, the CLB and/or the BCTESG. They do so by receiving and processing transfer transactions submitted to the CESP system by RESP promoters.

Via the CESP system, ESDC will:

• accept and process transfer transactions
• validate the RESP promoters’ records pertaining to the CESG, the CLB and/or the BCTESG, ensuring that information is maintained and has been accurately entered into the CESP system, and
• undertake compliance reviews to ensure:
  • promoters complete the transfer form and share information with other promoters
  • information is being submitted to and accepted by the CESP system, and
  • promoters accurately maintain their books and records to properly reflect all transfer transactions

9.2. RESP notional accounts – What they accomplish

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

An RESP may be comprised of the following notional accounts:

• assisted contributions made to the RESP by the subscriber
• unassisted contributions made to the RESP by the subscriber
• CESG (the Basic CESG and the Additional CESG)
• CLB – maintained separately for each beneficiary
• BCTESG
• earnings

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

When any financial transaction, which includes transfers, 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.

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:

• transfers are subject to ITA requirements and may have tax implications
• transfers must meet certain conditions to ensure the beneficiary’s continued eligibility for the education savings incentives
• transfers may impact contribution history and the effective date of the 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:

• the transferring and receiving plans have a common beneficiary, or
• a beneficiary in the receiving plan is a sibling of a beneficiary in the transferring plan and the receiving plan is a family plan, or
• a beneficiary of the receiving plan is a sibling of a beneficiary in the transferring plan, the receiving plan is an individual plan and the beneficiary of the receiving plan was under 21 years of age when the receiving plan was entered into

9.3.1.1. Determining if a transfer could have tax implications

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

• If the answer is “Yes”:
  • contribution history of the transferring plan won’t be applied to the receiving plan and the transfer won’t have tax implications
• 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
• If the answer is “No”:
  • contribution history of the transferring plan will be applied to the receiving plan and the transfer may have tax implications

Step 3: Is the receiving plan a family plan?

• If the answer is “Yes”:
  • contribution history of the transferring plan won’t be applied to the receiving plan and the transfer won’t have tax implications
• 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”:
  • contribution history of the transferring plan won’t be applied to the receiving plan and the transfer won’t have tax implications
• If the answer is “No”:
  • contribution history of the transferring plan will be applied to the receiving plan and the transfer may have tax implications

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:

• result in an over‑contribution for the beneficiary, which may incur a tax penalty on each subscriber’s share of over‑contributions that aren't withdrawn, and
• reduce lifetime RESP limits, even if over‑contributions are withdrawn

9.3.1.2. Example: Contribution history and potential tax penalties

Transferring plan – A:

• effective date before the transfer: April 2, 1998
• type of plan: family plan with siblings only
• incentives paid in plan: Basic CESG only
• beneficiaries: Carl and Janet

Receiving plan – B:

• effective date before the transfer: January 10, 2011
• type of plan: family plan with cousins
• incentives offered by the promoter: Basic CESG only
• beneficiaries: Harry, Suzan and Bob

The subscriber of plan A requested the transfer on January 21, 2011. Janet, Carl and Bob are siblings. 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 they were older than 21 because they were already named in another family RESP at that time.

This transfer would not have tax implications because:

• Bob (receiving plan) is a sibling of Janet and Carl (transferring plan), and
• the receiving plan is a family plan

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 follow conditions stipulated in:

• Canada Education Savings Regulations, and
• provincial regulations and agreements for any provincial incentive administered by ESDC

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

• the transfer must meet all of the conditions for an eligible transfer of any provincial incentive administered by ESDC, and
• the receiving plan must support all of the conditions for receiving these incentives

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

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:

• the transferring and receiving plans have a common beneficiary, or
• a beneficiary in the receiving plan is a sibling of a beneficiary in the transferring plan and the receiving plan is a family plan, or
• a beneficiary of the receiving plan is a sibling of a beneficiary in the transferring plan, the receiving plan is an individual (non‑family) plan, and the beneficiary of the receiving plan was under 21 years of age when the receiving plan was entered into

And:

• the receiving plan is an individual (non‑family) plan or a family plan in which all beneficiaries are siblings, or
• no Additional CESG has been paid into the transferring plan

And:

• the receiving promoter must have a valid agreement with ESDC to offer the CESG (condition 4 in section 9 of Part A of the transfer form)

And:

• the receiving plan complies with all conditions applicable to registering education savings plans (ESPs) since January 1, 1999, as required by the ITA

For more information, refer to section 9.3.5. When the receiving promoter does not offer the Additional CESG.

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

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

• If the answer is “Yes”:
  • go to step 2
• If the answer is “No”:
  • go to step 3

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

• If the answer is “Yes”:
  • go to step 4
• If the answer is “No”:
  • go to step 5

Step 3: 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 6
• If the answer is “No”:
  • the transfer is ineligible

Step 4: Does the receiving plan follow 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
• If the answer is “No”:
  • the transfer is ineligible

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

• If the answer is “Yes”:
  • the transfer is ineligible
• If the answer is “No”:
  • return to step 4

Step 6: Is the receiving plan a family plan?

• If the answer is “Yes”:
  • go to step 7
• If the answer is “No”:
  • go to step 8

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

• If the answer is “Yes”:
  • return to step 4
• If the answer is “No”:
  • return to step 5

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

• If the answer is “Yes”:
  • return to step 2
• If the answer is “No”:
  • the transfer is ineligible

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

Transferring plan – A:

• effective date before the transfer: April 2, 1998
• type of plan: family plan with siblings only
• incentives paid in plan: CESG
• beneficiaries: Maxim and Dianne

Receiving plan – B:

• effective date before the transfer: January 10, 2005
• type of plan: individual plan
• incentives offered by promoter: all incentives administered by ESDC
• beneficiary: Joel

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.

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

If such a transfer is permitted, the promoter must repay the CESG from plan A. To determine the amount to be repaid, refer to section 9.3.3. Ineligible transfers and repayments.

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

Transferring plan – A:

• effective date before the transfer: April 2, 1998
• type of plan: family plan with siblings only
• incentives paid in plan: Basic CESG only
• beneficiaries: Carl and Janet

Receiving plan – B:

• effective date before the transfer: January 10, 2011
• type of plan: family plan with cousins
• incentives offered by promoter: Basic CESG only
• beneficiaries: Harry, Suzan and Bob

The subscriber of plan A requested the transfer on January 21, 2011. Janet, Carl and Bob are siblings. 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 they were older than 21 because they were already named in another family RESP at that time.

This in an eligible transfer for the Basic CESG.

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:

• the transferring and receiving plans have a common beneficiary. If the CLB is transferred, it must be between CLB notional accounts in an RESP held for the same beneficiary
• if the receiving plan is a family plan, all beneficiaries are siblings
• the receiving promoter must have a valid agreement with ESDC to offer the CLB (condition 4 in section 9 of Part A of the transfer form), and
• the receiving plan complies with all conditions applicable to registering education savings plans (ESPs) since January 1, 1999, as required by the ITA

For more information, refer to section 9.3.6. When the receiving promoter does not offer the CLB.

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

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

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

Step 2: Is the receiving plan an individual plan?

• If the answer is “Yes”:
  • go to step 3
• If the answer is “No”:
  • go to step 4

Step 3: Does the receiving plan follow 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
• If the answer is “No”:
  • the transfer is ineligible

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

• If the answer is “Yes”:
  • return to step 3
• If the answer is “No”:
  • the transfer is ineligible

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

Transferring plan – A:

• effective date before the transfer: January 12, 2005
• type of plan: family plan with siblings only
• incentives paid in plan: the CESG (Basic and Additional) and the CLB (for Sarah)
• beneficiaries: Sarah and Jonathan

Receiving plan – B:

• effective date before the transfer: August 9, 2011
• type of plan: family plan with cousins
• incentives offered by promoter: all incentives administered by ESDC
• beneficiaries: Nancy, Joel and Sarah

The subscriber of plan A requested the transfer on September 7, 2011. This isn’t an eligible transfer for CLB because the receiving plan beneficiaries aren’t all siblings. Since the transfer isn’t eligible and the transfer is allowed to take place, the notional incentive accounts (CESG and CLB) of Plan A must be repaid. To determine the amount to be repaid, refer to section 9.3.3. Ineligible transfers and repayments.

The CLB repayments don’t 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 their 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 to avoid an ineligible transfer. In that case, no repayment of the CESG or the CLB would be required. For additional information, refer to section 9.4.1. Partial transfers.

9.3.2.8. 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:

• the transferring and receiving plans have a common beneficiary, or
• a beneficiary in the receiving plan is a sibling of a beneficiary in the transferring plan, and the receiving plan is a family plan, or
• a beneficiary in the receiving plan is a sibling of a beneficiary in the transferring plan, the receiving plan is an individual (non‑family) plan, and the beneficiary of the receiving plan was under 21 years of age when the receiving plan was entered into

And:

• if the receiving plan is a family plan, all beneficiaries are siblings

And:

• the receiving plan complies with all conditions applicable to registering ESPs since January 1, 1999, as required by the ITA

And:

• the receiving plan promoter offers the BCTESG

For more information, refer to section 9.3.7. When the receiving promoter does not offer the BCTESG.

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

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

• If the answer is “Yes”:
  • go to step 2
• If the answer is “No”:
  • go to step 3

Step 2: Is the receiving plan a family plan?

• If the answer is “Yes”:
  • go to step 4
• If the answer is “No”:
  • go to step 5

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

• If the answer is “Yes”:
  • return to step 2
• If the answer is “No”:
  • the transfer is ineligible

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

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

Step 5: 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 6
• If the answer is “No”:
  • the transfer is ineligible

Step 6: Does the receiving plan promoter offer BCTESG?

• If the answer is “Yes”:
  • go to step 7
• If the answer is “No”:
  • the transfer is ineligible

Step 7: Does the receiving plan follow 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
• If the answer is “No”:
  • the transfer is ineligible

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

Transferring plan – A:

• effective date before the transfer: August 3, 2009
• type of plan: family plan with siblings only
• incentives paid in the plan: the CESG and the BCTESG
• beneficiaries: Jordan and Jessica

Receiving plan – B:

• effective date before the transfer: January 10, 2013
• type of plan: individual plan
• incentives offered by promoter: all incentives administered by ESDC
• beneficiary: Rodney

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.

This transfer is eligible for the BCTESG because Rodney is a sibling of a beneficiary in the transferring plan, and they were 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 aren’t satisfied and the transfer is allowed to occur, the transferring promoter must repay the lesser of the following amounts to ESDC:

• the total of the balance in the CESG notional account, the balance of all provincial incentive notional accounts administered by ESDC and the balance of all of the CLB notional accounts of the transferring RESP immediately before the time of the ineligible transfer, and
• the amount determined by the formula: (C × Y) / (Y + G)

Where:

• C is the fair market value of the property held in the RESP, determined immediately before the time of the occurrence
• Y is the total balance in the grant account and all of the CLB accounts of the RESP immediately before the time of the occurrence, and
• G is the total balance in the RESP immediately before the time of the occurrence, of the amounts that were paid into the RESP under a designated provincial program

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

Example: Ineligible transfers and repayments

A subscriber initiated an RESP transfer 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 don’t satisfy all conditions for an eligible transfer must be repaid before 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. For more information, refer to section 9.3.7. When the receiving promoter does not offer the BCTESG.

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

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 application for incentives

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 sections 9.3.4.4. Pre‑transfer repayment example and 9.6.3. When there is a pending incentive.

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 section 9.5.1. Form overview.

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 before 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 BCTESG 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 $2,900. There is also a pending application for the CESG because of a recent $100 contribution that wasn’t 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
BCTESG	$1,200
Earnings	$400

While promoter B does not offer the BCTESG, the CLB or the Additional CESG, this promoter agreed to administer the rules for the Additional CESG. They could therefore accept a transfer that included the Additional CESG amounts. However, the partial transfer could not include either the BCTESG or the CLB, since the receiving promoter doesn’t offer these incentives. 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 BCTESG notional account balance ($1,200) 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 $1,200 BCTESG pre-transfer repayment transaction into their system, the RESP had a fair market value of $1,700 and the following notional account balances.

Table 2: Notional account balances after the BCTESG pre‑transfer repayment

Transferring RESP notional accounts	Notional account balances after the BCTESG pre‑transfer repayment
Assisted contributions	$500
Unassisted contributions	$100 (pending receipt of grant)
CESG	$200
CLB	$500
BCTESG	$0
Earnings	$400

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	$200

Promoter A (relinquishing promoter) indicated on the transfer form, Part C, section 6 that there was a pending application for the CESG at the time of the initial transfer. They did so without completing the section titled Notional transfer amount of pending grant(s)/bond of that same section of the form.

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) because of the pending CESG application. 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).

When performing a subsequent transfer due to pending incentives

Promoter A must complete sections 6 and 8 of Part C of a new transfer form and send it to the receiving promoter B with:

• a copy of page 1 of Part C of the initial transfer form; or
• a fully completed page 1 of Part C of the new transfer form

This transfer form, Part C indicated that $20 in CESG was transferred because of the pending CESG application that existed before 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:

• all beneficiaries named under the receiving RESP are siblings
• any additional beneficiaries named to the RESP after the transfer are siblings of every other beneficiary named under the RESP, and
• the presence of the Additional CESG in the RESP is reported in subsequent transfers

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 wasn't a sibling of the other beneficiaries.

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

• CESG notional account balance of $1,000, and
• a fair market value of $15,875

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.

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 promoter must determine the amount to refund. For more information on the amount to refund, refer to section 9.3.3. Ineligible transfers and repayments.

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.

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 their sibling 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 the 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. It removed the requirement to transfer amounts of the BCTESG in the same proportion as other properties in the RESP that is also 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 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 can’t be restored.

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:

• when contributions to the RESP must end
• when AIPs can start
• when the RESP must be terminated
• the age of a beneficiary when the receiving plan was entered into

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:

• contributions must stop
• AIPs can begin, and
• the plan must be closed

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 before 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:

• when contributions to plan B must end
• when AIPs can start from plan B
• when plan B must be terminated, and
• the age of a beneficiary when the receiving plan was entered into

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 before 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 the BCTESG notional accounts). In the case of a full transfer:

• the transferring RESP promoter transfers all monies in the transferring RESP (contributions, earnings, and education savings incentives) to the receiving plan, and
• the receiving RESP promoter will then ensure monies are deposited into the corresponding notional accounts in the RESP

9.4.1. Partial transfers

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

• the transferring RESP promoter must calculate and transfer the equal portion of the contributions, earnings and the CESG to the receiving plan (an example is provided below). For more information, refer to section 9.4.1.1. Step 1 – Determining the proportion of amounts to be transferred
• the CLB and the BCTESG are excluded when calculating the market value of the RESP to determine proportions
• the receiving RESP promoter will then ensure monies are deposited into the corresponding notional accounts in the RESP

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 and/or CESG that will be included in a partial transfer.

However, it’s helpful to understand the process for determining the correct proportion of the CESG notional account 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

3. 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 aren’t 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 section 9.7. An overview of the transfer process.

9.4.1.2. Step 2–Calculating the proportion of the CESG

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

The transferring RESP promoter will transfer $1,820 to the receiving RESP promoter identified by the subscriber.

For more information, refer to sections 9.3. Implications when transferring funds to another RESP and 9.3.2. Transfer conditions for the education savings incentives as well as 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.

For more information, refer to sections 9.3. Implications when transferring funds to another RESP and 9.3.2. Transfer conditions for the education savings incentives, as well as 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 follow all conditions applicable to the CESG, CLB and/or BCTESG to ensure it’s an “eligible” transfer with respect to the incentive.

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. They must also show that RESP notional balances were transferred and distributed appropriately between receiving and relinquishing RESPs.

The transfer form is used to:

• request and record the transfer of funds from one RESP to another
• facilitate the required exchange of information between RESP promoters
• ensure compliance with legislative requirements to retain the CESG, the CLB and/or the BCTESG in the RESP account, and
• collect the information that must be submitted electronically to the CESP system via an RT 400 financial transaction

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:

• Part A: subscriber request
• Part B: receiving promoter
• Part C: relinquishing promoter

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 Resources for RESP promoter 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:

• subscriber completes Part A
• receiving promoter completes Part B
• transferring promoter completes Part C

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 section 3.5.10. 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:

• complete their portion of the transfer form
• share all necessary and accurate information with the other promoters
• process the transfers in their systems and properly update notional accounts
• report the transfers to the CESP system in the format required by the ITS, and
• correct any transactions that are rejected due to errors

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.

• the relinquishing promoter sends a transaction type “23” (transfer out)
• the receiving promoter sends a transaction type “19” (transfer in)

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:

• processed transfer transactions which report successfully processed transactions
• rejected transfer transactions which report transactions with errors that must be corrected

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

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

5. 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 section 9.5. Transfer form.
6. the RESP promoters obtain all the required signatures on the transfer form. It is suggested that the form be completed and signed in duplicate
7. the RESP promoters retain the signed versions of the RESP transfer form and file according to the organization’s record keeping procedures
8. 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 section 9.6. Guidelines for successful transfers

9. the CESP system accepts and processes transfer transactions from RESP promoters. For more information, refer to sections 9.6. Guidelines for successful transfers and 9.6.4. Processing transfer transactions