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Frequently asked questions for the Registered Education Savings Plans (RESPs)

General Information

1. What is a Registered Education Savings Plan (RESP)?

An education savings plan (ESP) is a savings vehicle generally used by parents to save for their children">

The subscriber makes contributions that accumulate tax-free earnings. In return the promoter agrees to use the accumulated funds to pay or to cause to be paid educational assistance payments to one or more beneficiaries designated by the subscriber.

An RESP is an ESP that has been registered with Canada Revenue Agency (CRA).

Types of plans:

Non-family plans: These plans can only have one beneficiary. There are no restrictions on who can be a beneficiary under these plans. This means that anyone can be the beneficiary of a non-family plan. The subscriber is free to decide when and how much they want to contribute. The subscriber can also decide to take a break in contributions at any time.

Family plans: These plans can have one or more beneficiaries. However, each beneficiary must be connected by blood or adoption to each living subscriber under the plan or have been connected to a deceased original subscriber. The subscriber is free to decide when and how much they want to contribute. The subscriber can also decide to take a break in contributions at any time.

Group plans: These plans are usually offered by non-taxable entities like foundations. These plans are administered on an age group concept i.e. all contracts for beneficiaries who are 9 years old are administered together. Contributions to a Group plan are calculated by the Foundation's actuary. The amount and frequency of these contributions stay the same as long as the beneficiary has not attained 18 years of age. For more information about RESPs, see the publication RC4092 Registered Education Savings Plan or call one of the following numbers:

Toll-free in Canada and the United States: 1-800-267-3100.

If you are calling from outside of Canada or the United States, call us collect at 613-221-3105. The Registered Plans Directorate accepts collect calls.

You can also consult Registered Education Savings Plans and related benefits. 

The following sections contain questions and answers arranged by topic heading.

Promoter

The promoter is a person who offers education savings plans (ESPs) to the public. The promoter administers all amounts contributed into the RESP and releases money from the RESP to the beneficiary when it is needed for eligible expense for post-secondary school level. Consult the list of RESP promoters to see where you can open an RESP. 

2(a) How does a promoter set up an ESP?

A promoter has to send a copy of the proposed specimen ESP to the Registered Plans Directorate for approval before entering into any contracts with subscribers.

The specimen plan must include the following documents:

2(b) Is it possible to have a three-party contract when the ESP is established?

A contract involving the promoter, the trustee and the subscriber would be acceptable as long as the contract clearly defines the duties and responsibilities of each party. The contract must state that the promoter is responsible for paying or causing to be paid the educational assistance payments and that a trust must be established to hold the assets of the RESP.

2(c) A promoter has sent to the Canada Revenue Agency all the required documents for a proposed specimen ESP. The documents have been reviewed, the proposed specimen ESP has been approved and the promoter has received an approval number. What is the next step?

The promoter can now start selling ESP contracts. In doing so, the promoter must ensure that the subscriber(s) fill out the proper application in relation to the chosen savings incentive (Canada Education Savings Grant (CESG),  Canada Learning Bond (CLB) and/or British Columbia Training and Education Savings Grant (BCTESG) and Quebec Education Savings Incentive (QESI)).

The promoter must wait until they have collected all the information necessary to register at least 150 contracts (under one or more specimens) before sending a file requesting the registration of contracts. Listing of contracts must be submitted electronically to the Canada Education Savings Program (CESP). An electronic submission will be considered a request for registration. The CESP system will verify that the information is complete, validate the information and, if so, will acknowledge receipt of the information for registration purposes. We send letters twice a year to confirm the registration of the contracts. For further information on electronic submission of listings for contracts, please consult the Interface Transaction Standards for the CESP at Employment and Social Development Canada (ESDC). You can call them at 1-888-276-3624 for more information.

2(d) How and when does the promoter submit contracts for registration?

Promoters must submit electronically to the CESP in accordance with the Interface Transaction Standards.

2(e) (archived)

2(f) (archived)

2(g) What is the process for amending a specimen plan?

In order to amend a plan, a promoter can either amend specific terms of an existing specimen plan or set up a new specimen including the new terms. However, if an existing specimen is amended, all contracts under that specimen number must also be amended. If subscribers are permitted to and choose not to amend their contract, the associated specimen will have to stay the same and a new specimen plan set up with the new terms. Some subscribers might also want to have their funds transferred from their prior contract to a contract including the new terms.

2(h) (archived)

2(i) Can a minor be a subscriber?

There are no minimum age requirements under the Income Tax Act (the Act) concerning the age of the subscriber. However, the promoter may want to verify contract laws concerning this issue.

2(j) Does the Canada Revenue Agency have a written policy on how a promoter should maintain accounts for the funds held under a RESP?

The Canada Revenue Agency does not have a written policy on how a promoter should maintain accounts for RESPs. However, promoters might want to contact ESDC to ask about accounting policies for the CESP.

2(k) Can a promoter offer subscribers an advantage when contracting for an ESP?

 No, the Income Tax Act imposes a special tax if certain supplementary advantages are provided in relation to an RESP. The tax is equal to the amount of the advantage and is payable by the subscriber of the plan, unless the advantage is extended by the promoter of the plan, in which case it is payable by the promoter.

For more information, see Income Tax Folio S3-F10-C3, Advantages – RRSPs, RESPs, RRIFs, RDSPs, FHSAs and TFSAs.

2(l) Does the promoter have to keep track of the beneficiary's age for all the age-related rules?

Yes. The promoter must keep a record of each beneficiary's date of birth and has to comply with all age related rules.

2(m) Are there any restrictions on the type of investments an RESP trust can hold?

Yes. All investments held by a trust governed by an RESP must be "qualified investment" as defined in the Act. With the exception of certain annuity contracts, the types of property that qualify for an RESP are the same as those that qualify for a Registered Retirement Saving Plan.

Some of the common types of qualified investments for an RESP are:

See Income Tax Folio S3-F10-C1, Qualified Investments – RRSPs, RESPs, RRIFs, RDSPs, FHSAs and TFSAs to find more in-depth information about qualified investments.

2(n) Are there any restrictions on foreign content?

No.

2(o) Can an estate establish an RESP?

No. An estate is defined as a trust under the Act. The Act's definition of ESP excludes a trust from being party to the contract.

Subscriber

A subscriber is the individual who enters into an ESP contract with a promoter, and names one or more beneficiaries for whom they will make contributions. Below is a list of who can be a subscriber and what they need to provide to register the plan.

3(a) (archived)

3(b) You mentioned that only spouses/former spouses can be joint subscribers in an RESP. In 1995, my daughter and I entered into a contract for my grandson. Do I have to change my contract to become the sole subscriber?

No. We have chosen not to revoke contracts entered into prior to 1998 and permitting joint subscribers who were not spouses of one another despite the fact that these plans do not comply with the definition of "education savings plan" applicable after 1997. However, your plan will have to be amended to comply with all of the other registration conditions applicable after 1997.

3(c) Can the subscriber be changed under an RESP?

Yes. A spouse/former spouse can replace the original subscriber in the event of marriage breakdown, if the separation or divorce is recognized by a decree, order or judgment.

It is also possible to change the subscriber after the death of the original subscriber for contracts that permit it and were entered into after 1997. In this situation, any person (including the estate of the deceased subscriber) who acquires the person's rights as a subscriber under the plan or who makes contributions to the plan for the beneficiary can become a subscriber. However, the promoter may also want to verify provincial estate laws concerning this issue.

In both situations, the new subscriber is considered to have made all the contributions to the plan. As a result, they may be responsible for any excess contributions tax payable after 1997 on excess RESP contributions in the months following the change.

3(d) Does a subscriber need to be a resident of Canada?

There is no residency requirement under the Act for RESP subscribers. However, a subscriber needs to provide a social insurance number (SIN) when the promoter applies to have the ESP registered.

3(e) Can a minor child be a subscriber in a plan for his/her parents?

There is no age restriction under the Act that would prevent a child from being a subscriber in a plan for their parents. Promoters may be reluctant to enter into a contract with a minor due to provisions of contract laws.

3(f) Can godparents or family friends contribute to an RESP for a child?

An RESP does not allow for any contribution into the plan, other than a contribution made by or on behalf of a subscriber under the plan in respect of a beneficiary under the plan or a contribution made by way of transfer from another registered education savings plan. 

Anyone who wants to contribute to a child's education can contribute to an RESP with the subscriber’s consent, subject to the beneficiary's lifetime limit and plan requirements.

However, anyone wishing to establish an RESP for a beneficiary should contact the beneficiary's custodial parents, as the beneficiary's SIN is required.

3(g) Can an employer sponsor an RESP for its employees?

An employer could sponsor an RESP for its employees as long as it is clear that the contract is strictly between the promoter and the employee (subscriber) and that the employer is only acting as an agent. The employee, as subscriber of the plan, should be the only one contributing to the plan, for example, through payroll deductions. However, if an employer is interested in participating, the amount paid by the employer will be considered as a taxable benefit to the employee and included on the employee's T4 as income. We would like to remind you that since RESP contributions are not tax deductible, the employee would not be able to offset the increase in their income.

All information and all documents related to such plan would have to be presented to the Registered Plans Directorate for approval.

Beneficiary

A beneficiary of an RESP is a person to whom, or on whose behalf, a promoter agrees to make educational assistance payments.

The beneficiary has to qualify for the payments at the time they are made. Generally, a subscriber is not restricted in choosing a beneficiary for an RESP. However, effective January 1, 2004 an individual cannot be designated as a beneficiary unless the individual's social insurance number (SIN) has been provided to the promoter of the plan and the beneficiary is resident in Canada.

In a family plan, each beneficiary must meet both of the following conditions:

4(a) How many plans can be established for one beneficiary?

There are no limits on the number of plans a subscriber can establish for a beneficiary, or the number of RESPs a beneficiary may have. However, the lifetime contribution limit is per beneficiary, and cannot be circumvented by establishing multiple plans for the same beneficiary.

4(b) In March 1989, I entered into an RESP family contract. There was no mention in my contract that each beneficiary had to be related to the subscriber by blood or adoption. Consequently, one of the beneficiaries in my plan is not directly related to me. Do I have to remove this beneficiary from the plan?

The provision permitting the designation of non-related beneficiaries in contracts established prior to July 14, 1990 has been grandfathered. The clause permitting the participation of non-related beneficiaries in a family plan can be kept in the plan. Your promoter must amend their corresponding specimen plan to comply with the legislation but may keep this clause in the specimen. You will be able to keep this beneficiary in your plan and contribute for their education but your plan will not be entitled to any CESG.

4(c) Can a subscriber also be a beneficiary under a particular plan?

A subscriber can be a beneficiary only under a non-family plan. The requirement that each beneficiary be connected by blood relationship or adoption to each subscriber prevents a subscriber from being a beneficiary under a family plan.

4(d) Who can be a beneficiary in a non-family plan?

There is no restriction on who can be the beneficiary of a non-family plan.

4(e) Can a person with a mental or physical disability become a beneficiary under an RESP?

Yes, as long as this person meets all other provisions of the Act that apply to RESPs.

4(f) What does blood relationship mean?

Under the Act, a blood relationship is that of a parent and child (or other descendant, such as a grandchild or a great grandchild) or that of a brother and sister. Other individuals might also qualify as related by blood in some circumstances - see question 4(g).

4(g) Is an adopted child related to his grandparents?

The definition of adoption includes both a legal adoption and an adoption in fact. Whether an adoption in fact has occurred is determined based on the facts in each case. For instance, an adoption is considered to have occurred if circumstances show that a child is wholly dependent on, and in the custody and control of, the "adopting" parent. In this situation, the child is connected by adoption to his parents.

Under the Act, there is a blood relationship connection between a parent and a child (or other descendant, such as a grandchild or a great grandchild) or between a brother and a sister. An individual's niece, nephew, aunt, uncle or cousins are not connected by blood to that individual.

According to the Act, individuals connected by blood relationship, marriage or adoption are related persons. Consequently, an adopted child is related to his grandparents since the child is connected by adoption to his parents who are connected by blood relationship to their parents. Similarly, the child of a spouse living in a long-term common-law relationship is the adopted child in fact of the other spouse if that spouse exercises effective parental care and guidance on a continuing basis. The child will also be related to both sets of grandparents.

4(h) Can the beneficiary be changed or replaced?

Yes, as long as the terms of the plan allow it. This applies to both family plans and non-family plans.

For the purposes of the tax on overcontributions to an RESP, all contributions made to the plan for the previous beneficiary are considered to have been made to the plan at the earlier date for the new beneficiaries. However, the tax will not apply if the new beneficiary is less than 21 years old before being named, and one of his or her parents is the parent of the previous beneficiary.

The tax also does not apply if both the previous and new beneficiaries were less than 21 years old at the time, and were connected by blood relationship or adoption to an original subscriber of the plan.

4(i) What happens if the beneficiary does not go to post-secondary school?

If the beneficiary does not go to post-secondary school and if another beneficiary is not named, the property held under the trust can be used for any combination of the purposes outlined under the definition of trust in the RESP section of the Act.

For example, the investment earnings could be paid, under specified conditions, in the form of accumulated income payments to the subscriber(s) or to a designated educational institution.

Contributions

Contributions to RESPs are not deductible from the subscriber's income.

A plan can only accept a contribution for a beneficiary under the plan if the beneficiary is resident in Canada and the beneficiary's SIN has been provided to the promoter of the plan.

A contribution to an RESP does not include an amount paid into the plan under the Canada Education Savings Act (CESA) or under a designated provincial program.

Lifetime contribution limits depend on the calendar year. The lifetime limit for 1996 to 2006 was $42,000, and for 2007 and future years is $50,000. These limits apply to each beneficiary regardless of the number of plans for that particular beneficiary.

5(a) Do contributions to an RESP include insurance premiums, or administration or trustee fees?

Contributions to an RESP cannot include insurance premiums.

If administration or trustee fees are charged outside the plan, they are not part of the contributions. If they are charged within the plan, they can be considered part of the contributions. However, keep in mind that only actual contributions are subject to the lifetime limits, and qualify for the CESG.

5(b) Is it possible to assign RESP contributions or to use them as collateral for a loan?

No. One of the conditions for registering an ESP is that the property of any trust it controls must be held irrevocably for one of the following purposes:

Use of RESP funds as collateral for a loan would not qualify for any of these purposes. 

A refund of contributions could result in an obligation to repay the CESG. For more information, go to Education Savings.

5(c) (archived)

5(d) What are the consequences of overcontributing to an RESP?

Excess contributions to an RESP are subject to a 1% per month tax for the excess amount contributed.

Subscribers have to file Form T1E-OVP, Individual Tax Return for RESP Excess Contributions, for overcontributions based on contributions to all of the plans for a beneficiary. For more information, call the individual tax enquiries line at 1-800-959-8281.

5(e) Do the contributions belong to the subscriber or to the beneficiary?

Control of the subscriber's contributions remains with the subscriber. However, this does not prevent the payment of these amounts to the beneficiary by or on behalf of the subscriber.

5(f) Must contributions made to a family plan be allocated to specific beneficiaries?

Yes. Every time a subscriber makes a contribution to a family plan, the subscriber must assign amounts to specific beneficiaries.

5(g) How long can contributions be made to an RESP?

For 2008 and subsequent taxation years, contributions may be made into the plan by or for the subscriber up to the 31st year following the year in which the plan was opened. However, if the beneficiary can claim disability tax credit for the 31st year following the year in which the plan was opened and they are in a non-family plan, the maximum period during which contributions may be made to the RESP can be extended to 35 years, if your existing plan provides for it.

For information on eligibility for disability tax credit, see the folios S1-F1-C1, Medical Expense Tax Credit, S1-F1-C2, Disability Tax Credit, and S1-F1-C3, Disability Supports Deduction.

5(h) What is a designated provincial program?

A designated provincial program is a program administered in accordance with an agreement entered into under section 12 of the CESA or a prescribed program. The Quebec Education Savings Incentive offered by the Government of Quebec is prescribed for this purpose. Contributions do not include an amount paid into the plan under a designated provincial program.

Educational Assistance Payments

An educational assistance payment (EAP) is a distribution to a beneficiary, under certain conditions, of amounts in an RESP. These amounts include accumulated income on contributions, the Canada Education Savings Grant (CESG), additional CESG , Canada Learning Bond (CLB) and provincial incentives, as well as income accumulated on these incentives. The EAP is to assist the individual to further his or her post-secondary education.

For a payment to qualify as an EAP at the time it is made, the beneficiary has to be enrolled in a qualifying educational program (full-time studies) at a post-secondary educational institution  or the beneficiary has to be at least 16 years old and enrolled as a student in a specified educational program (part-time studies) at a post-secondary educational institution. An EAP may be paid to a beneficiary at any time in the six-month period immediately following the particular time at which the beneficiary ceases to be enrolled as a student.

To be considered a qualifying educational program, the program must be at a post-secondary level, last at least three consecutive weeks, and require at least 10 hours of instruction or work per week. The maximum amount payable to a beneficiary under the RESP (and all other RESPs from the same promoter) is $8,000, unless the beneficiary has completed 13 consecutive weeks in a qualifying educational program, in the previous 12 months. The Minister designated for purposes of the Canada Education Savings Act is required to approve, on a case-by-case basis, an EAP amount that is higher than the $8,000 limit stipulated in the Act.

To be considered a specified educational program, the program must be at a post-secondary level, last at least three consecutive weeks, and require no less than 12 hours per month on courses in the program. The total amount of EAPs made to a beneficiary under the RESP (and other RESPs from the same promoter), in the preceding 13-week period cannot exceed $4,000. The Minister designated for purposes of the Canada Education Savings Act is required to approve, on a case-by-case basis, an EAP amount that is higher than the $4,000 limit stipulated in the Act.

6(a) (archived)

6(b) The expenses related to my child's post-secondary education for the first 13 weeks amounted to $3,800. Can we ask for the $8,000 permitted for the first EAP?

No. The amount of the first EAP payable to cover the first 13 consecutive weeks in a qualifying program is limited to the lesser of the amount of the expenses and $8,000. Since the expenses totalled $3,800, the first EAP can only be of this amount.

6(c) What documentation should a promoter get from a beneficiary before making an EAP?

The promoter is required to obtain proof that the beneficiary is enrolled in a qualifying educational program at a post-secondary school level at a designated educational institution. A promoter is not required to obtain receipts from a beneficiary as proof of expenses before making an EAP.

The purpose of an EAP is to assist the beneficiary to further their education at a post-secondary school level. If an EAP does not satisfy this requirement, the payment will not be considered an EAP but rather an accumulated income payment (AIP) and would be taxed accordingly. This means that the payment would be subject to the recipient's basic tax rate plus the additional 20% (12% in Quebec) AIP tax. Promoters may wish to remind subscribers and/or beneficiaries of the consequences of an EAP being paid that is not to assist the beneficiary to further their post-secondary education.

6(d) Who determines the "reasonableness" of an expense?  What if the subscriber and the promoter disagree on a specific expense?

The promoter is responsible for administering the plan in accordance with the Act. Therefore, the promoter determines the "reasonableness" of a specific expense for an EAP.

Any expense paid in accordance with the Act and the terms of the plan would be a reasonable expense. An important factor to consider is whether the expense actually helps the beneficiary to further their studies.

6(e) (archived)

6(f) A promoter makes a partial EAP to a beneficiary who dies before receiving the second part of the EAP. Can this payment be made to the beneficiary's estate?

No. The definition of an EAP under the Act provides that the payment be made "...to assist the individual to further the individual's education at a post-secondary school level". Since the beneficiary's estate would not be able to meet this requirement, the second part of the EAP cannot be made to the beneficiary's estate.

6(g) Can an EAP be paid to a beneficiary for fees from a previous semester if they are no longer enrolled in school?

Yes. If the plan provisions permit it, beneficiaries who cease to be enrolled in a qualifying educational program or a specified educational program are allowed to receive EAPs for up to six months after ceasing enrolment, provided that the payments would have qualified as EAPs if they had been made immediately before the student's enrolment ceased. If an EAP does not satisfy all these requirements, the payment will not be considered an EAP but rather an AIP, and it would be taxed accordingly. For more information on AIPs, see publications RC4092 Registered Education Savings Plans (RESP) and IC93-3R Registered Education Savings Plans.

6(h) (archived)

6(i) Is there a maximum amount a beneficiary can receive as an EAP? What is considered reasonable?

No. As long as the payment qualifies as an EAP at the time it is made there is no maximum limit (see EAP introduction). On August 12, 2008, a yearly EAP threshold of $20,000, indexed annually by the Consumer Price Index, was established to assist promoters in determining the reasonableness of an EAP request. The CRA will not question legitimate EAP requests below the EAP threshold, nor will the promoters be expected to assess the reasonableness of each expense item, as long as the conditions permitting an EAP are met. Refer to Registered education savings plan (RESP) Bulletin No.1R.

However, the Minister designated for the purposes of the Canada Education Savings Act is still required to approve, on a case-by-case basis, an EAP amount that is higher than $8,000, if the student has not completed 13 consecutive weeks in a qualifying educational program in the previous 12 months, or an EAP amount higher than $4,000 throughout any 13-week period during which the student is enrolled in a specified educational program.

Any expense paid in accordance with the Act and the terms of the plan would be a reasonable expense. An important factor to consider is whether the expense actually helps the beneficiary to further their studies.

6(j) What is a post-secondary educational institution for the purposes of an EAP?

A post-secondary educational institution for the purposes of an EAP can be one of the following:

The post-secondary educational institution must only satisfy one of the criteria above to be eligible for EAP purposes. For instance, if the educational institution is not designated under the Canada Student Loans Act but is certified by Employment and Social Development Canada, it is acceptable for EAP purposes. It is the promoter's responsibility to examine all relevant authorities to verify if an educational institution is recognized for EAP purposes. Please see the next question for more information.

6(k) How does one confirm if a post-secondary educational institution is recognized for EAP purposes?

To verify if a particular educational institution in Canada is designated under the Canada Student Loans Act or the Canada Student Financial Assistance Act, please contact your provincial or territorial student financial assistance office. To obtain the contact information for the student financial assistance office in your area, please contact Service Canada at 1-800-O-CANADA (1-800-622-6232) or consult the Provincial and territorial student financial assistance offices.

The Canada Student Loans Program of Employment and Social Development Canada (ESDC) produces a Master List of Designated Educational Institutions. All provinces, with the exception of the Northwest Territories, Nunavut, and the province of Quebec, participate in the Canada Student Loans Program. For more information, consult the List of designated educational institutions.

For information regarding eligible post-secondary educational institutions in the province of Quebec, please contact Quebec's Loans and Bursaries Program at 1-877-643-3750 or consult the Student Financial Assistance.

To verify if a particular educational institution in Canada has been certified by Employment and Social Development Canada, please contact ESDC's Certification Program at 1-866-517-5650 or consult the List of certified institutions.

Please note that educational institutions (EI), whether public or private, do not need to be certified by ESDC if they have already been designated by a province for the purposes of student financial assistance. To check if a specific EI is registered under provincial or territorial legislation or policy, consult the appropriate provincial or territorial authorities.

The CRA individual income tax enquiries line can provide information regarding eligible educational institutions within Canada as well. Please contact one of the following numbers:

Eligible educational institutions outside of Canada do not have to be on a list for EAP purposes. In order for an EAP to be paid out, the educational institution must provide courses at a post-secondary school level and the beneficiary must have been enrolled in a course of not less than 13 consecutive weeks. After 2010, an EAP can be paid to a beneficiary enrolled at a university outside Canada on a full-time basis in a course of not less than three consecutive weeks.

Accumulated Income Payments (AIP)

An AIP is any distribution from an RESP, excluding the following:

AIPs usually include earnings on contributions made to the plan, and may include earnings on the CESG , CLB, and provincial incentives. AIPs may be allowed, if both following conditions are met:

And, one of the following condition is also met:

When AIPs are made from an RESP, the plan must be terminated by the end of February of the year after the year in which the first payment is made. These payments are also subject to two different taxes: the regular income tax and an additional 20% tax (12% for residents of Quebec).

It is possible for some subscribers to reduce the payable tax by transferring their AIPs to their registered retirement savings plan (RRSP) or a spousal RRSP if they have accumulated enough contribution room. This transfer is limited to $50,000.

7(a) A subscriber set up an individual non-family plan for his niece a little more than 7 years ago. His niece recently died. Is the subscriber entitled to AIPs or does he have to wait until the plan has existed for 10 years?

Under the Act, if a plan allows for AIPs, the requirement that the plan exists for 10 years does not have to be met if the beneficiary is deceased.

7(b) Subscribers set up an Individual non-family plan for their only child. The plan has also existed for a little more than 7 years. The child was recently diagnosed with a severe and prolonged mental impairment that will prevent him from pursuing post-secondary education. Are the subscribers entitled to AIPs?

It is a question of fact. If the mental impairment prevents the beneficiary from enrolling in a qualifying educational program at a post-secondary educational institution, the Minister of National Revenue may waive the conditions requiring that each beneficiary be 21 years old and that the plan has been in existence for 10 years The promoter of the plan should send a written request to:

Due to a building refit spanning multiple years, the Registered Plans Directorate’s mailing address has been temporarily changed. Please use the following address for all correspondence until further notice:

Registered Plans Directorate
Canada Revenue Agency
2215 Gladwin Cres
Ottawa ON  K1B 4K9

7(c) Is it possible to transfer assets from an RESP to an RRSP?

The only assets that could be transferred from an RESP to an RRSP are those that would qualify as an AIP (income earned on contributions, CESG, additional CESG, CLB and provincial incentives). The requirements for the payment of an AIP, specified in the first paragraph of section 7, would have to be met before such transfer would be permitted. The amount that would be permitted to be transferred would be limited to the lesser of the subscriber’s unused RRSP contribution room and $50,000. Although the promoter of the RESP would send the assets directly to the financial institution administering the RRSP, it would be an indirect transfer. This means that the subscriber would have to include the amounts transferred in his income and deduct the same amounts as contributions to his RRSP.

7(d) A subscriber is entitled to an AIP and wants to contribute that amount to his RRSP. However, the subscriber does not have enough unused RRSP contribution room. Could he add his spouse to his RESP before termination?

A spouse can be added to an RESP that permits joint subscribers at any time before termination.

Transfers

Transfers of property between RESPs are generally not restricted. The effective date of the plan where funds have been transferred, whether it is a partial or total transfer, will be the earlier of:

The effective date is used to determine:

Transfers can be made without resulting in any tax in the following cases:

8(a) I want to transfer to a new plan. Can I transfer the RESP money to the new plan before it is registered?

No. The receiving plan must be registered with CRA before the funds are transferred. If not, the transferring plan will be considered as having been paid to the subscriber as an AIP. It is up to the subscriber and the promoter to ensure that the new plan is registered before transferring the funds.

8(b) My contract has a grandfathered clause. I'd like to take advantage of all the new benefits permitted by the legislation and receive the CESG. Could I transfer the assets of my plan to a new contract?

It is possible to transfer the assets of a plan to a new plan if your existing plan provides for it. If, as mentioned above, it is for the same beneficiary, no tax should be incurred.

8(c) Can we transfer an Individual non-family plan to any other Individual non-family plan? Is the relationship between the different subscribers and/or beneficiaries important in such transfer? What would be the possible consequences of such transfer?

There are no requirements concerning the relationship between subscriber and beneficiary in a non-family plan. Transfers between such plans are therefore permitted at any time if plan terms provide for it. Since non-family plans can cover only one beneficiary, it is assumed that the status of the beneficiary of one of the plans will be changed. The amounts transferred will be deemed to have been contributed in the receiving plan at their original date unless the same individual was beneficiary under the two plans or the beneficiary under the receiving plan was under 21 years of age and a sibling of the beneficiary under the transferring plan.

As mentioned above and for the application of certain rules, the effective date of the receiving plan could be deemed to be different.

8(d) Can an RESP be transferred to a plan with a different subscriber but the same beneficiary? For example, can a grandmother who has an RESP for her granddaughter transfer this plan to her daughter's plan for the same child?

Yes. Transfer rules would permit such transfer. The rules also specify that if the beneficiary under the receiving plan was, immediately before the transfer, a beneficiary under the transferring plan, the contribution history would not apply to the receiving plan for excess contributions purposes. This would apply for family and non-family plans.

It should be noted that a subscriber cannot be changed within a contract except as stipulated under the answer to 3(c) above.

8(e) Is there a "transfer form" to use when initiating transfers?

The promoter of the RESP transferring the property has to give the promoter of the RESP receiving the property enough information to continue to administer the transferred property. For more information refer to paragraphs 55 to 57 of IC93-3R Registered Education Savings Plans.

Employment and Social Development Canada requires that form SDE 0100 be completed for all individual transfers. Please see the Forms tab on the Resources for Registered Education Savings Plan promoters page.

8(f) Can a family plan be split into non-family plans or non-family plans combined into a family plan?

Non-family plans can effectively be set up to receive amounts transferred from a family plan, as well as the reverse.

In both cases, the promoter of the receiving plan would have to apply the rules concerning the effective date of the new plan. In each situation, rules concerning the beneficiaries of a family plan could apply.

If the beneficiary is the same individual under both plans, or the beneficiary under the originating plan is a sibling of a beneficiary under the receiving plan, no excess contributions tax would apply after the transfer.

8(g) A subscriber is entitled to an accumulated income payment (AIP) under the plan set up for their son. Can the subscriber receive part of the AIP and transfer the balance in the plan to a plan set up for their daughter?

Providing the plan set up for your son allows for AIPs and that the conditions described in Section 7 Accumulated Income Payments are met, it is possible to receive the AIP. However, the Act provides that a plan cannot allow for the receipt of property by way of direct transfer from another plan that has made an AIP. Consequently, the subscriber should transfer the desired amount to their daughter's plan and then, receive an AIP under their son's plan.

Plan Termination

9(a) When does an RESP have to terminate?
An RESP must be terminated on or before the last day of the 35th year following the year in which the plan was entered into.

However, if the beneficiary can claim disability tax credit for the 31st year following the year in which the plan was opened and they are in a non-family plan, the maximum period during which the RESP may be in existence can be extended to 40 years following the year the plan was entered into, if your existing plan provides for it.

For information on eligibility for disability tax credit, see the folios S1-F1-C1, Medical Expense Tax Credit, S1-F1-C2, Disability Tax Credit, and S1-F1-C3, Disability Supports Deduction.

9(b) What happens to the assets following termination of a plan?
The assets of an RESP can only be used for the following purposes:

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