Transfer a registered disability savings plan

From: Canada Revenue Agency

The holder(s) of a registered disability savings plan (RDSP) can ask the financial institution administering the RDSP to transfer it to another RDSP. 

Direct transfers to another RDSP

The new RDSP must have the same beneficiary as the outgoing RDSP. The financial institution administering the outgoing RDSP must transfer all of the RDSP property directly to the new RDSP. As this is a direct transfer, the transferred property does not need to be included in the beneficiary’s income for the tax year. 

All of the information needed to meet the Income Tax Act and Canada Disability Savings Act rules must be given to the financial institution administering the new RDSP. Use Form EMP5611E, Registered Disability Savings Plan Transfer to record the required information. For a list of required information see paragraphs 54 and 55 of IC99-1R, Registered Disability Savings Plans.

To complete the transfer, the financial institution administering the outgoing RDSP must terminate that RDSP as soon as the funds have been transferred to the new RDSP. It is important that the financial institution sets the transfer indicator to “yes” on the contract registration information record type 101-01.

Administering a newly transferred RDSP

When a financial institution opens an RDSP because of a transfer, they must electronically send registration information to Employment and Social Development Canada. It is important that the financial institution sets the transfer indicator to “yes” on the contract registration information record type 101-01.

If the beneficiary was 59 or older at the beginning of the year of the transfer, the beneficiary must be paid any lifetime disability assistance payments that the transferring plan would have paid during the rest of the year, had the transfer not taken place.

The terms of the beneficiary’s previous plan may have allowed for rollovers, specified disability savings plan designations, or qualifying family member holders. The new plan must allow for the same measures.

Related links:

Income Tax Act, subsection 146.4(8)

 

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