RESP transfers and rollovers simplified

Plain-language summary

• A clean RESP-to-RESP transfer is not the same as cashing out. The money should move directly between RESP trustees or promoters, with enough history for the receiving promoter to keep administering the plan.
• The simplest low-risk transfer is between two registered RESPs for the same beneficiary. CRA says most same-beneficiary transfers have no tax implications.
• Sibling transfers can also work, but the exact plan type and the receiving sibling's age can affect tax, contribution-history, CESG, CLB, and provincial-incentive treatment.
• ESDC's transfer guidance says the transferring and receiving plans must both be registered, the transferring plan must not already have paid an accumulated income payment, and the plan terms must allow the transfer.
• Rollovers to an RRSP or RDSP are different from RESP-to-RESP transfers. They usually involve leftover accumulated income, not your original contributions or unused government grants.

Action steps

1. Ask the receiving promoter to confirm that the new RESP is already registered before the old promoter sends money.
2. Identify whether this is a same-beneficiary transfer, a sibling transfer into a family plan, or a sibling transfer into an individual plan.
3. Ask both promoters whether the old plan has ever paid an accumulated income payment. If it has, pause before assuming a transfer is still available.
4. Request a written breakdown of contributions, CESG, additional CESG, CLB, provincial incentives, earnings, fees, and prior withdrawals before signing the transfer form.
5. For a partial transfer, ask which percentage of each notional account balance will move and whether any CLB is being left behind or transferred.
6. Confirm whether the transfer will trigger repayment of CESG, CLB, BCTESG, QESI, or any other provincial incentive.
7. Ask whether the old plan's effective date will carry over and affect the receiving plan's contribution deadline, AIP eligibility date, or final termination date.
8. If school is unlikely and you are thinking about RRSP or RDSP rollover options, first confirm whether the amount is eligible accumulated income and whether the RESP contract allows AIPs.

Caveats to watch

• CRA says the receiving RESP must already be registered. If it is not, the transfer can be treated like an accumulated income payment instead of a clean RESP transfer.
• A transfer does not necessarily reset the RESP clock. CRA's technical circular says the earlier effective date of the two plans applies after the transfer.
• Contribution history can follow the money. CRA warns that in some transfers, the receiving plan may be treated as if the old contributions had been made there, which can create excess-contribution risk.
• A sibling transfer into an individual plan is especially sensitive if the receiving plan was entered into after the receiving beneficiary turned 20.
• Additional CESG and CLB do not always follow the same transfer rules as ordinary contributions or earnings. ESDC's transfer guidance has separate eligible-transfer conditions for CESG and CLB.
• Unused grants and bonds are not subscriber property. When a plan closes or an ineligible transfer happens, federal and provincial incentive amounts may have to be repaid.
• An RRSP transfer path normally applies only to eligible accumulated income payments and is limited by the subscriber's available RRSP room and the $50,000 AIP transfer limit.
• An RDSP education savings rollover can avoid regular AIP tax, but it requires the same beneficiary, DTC eligibility, Canadian residency, age and RDSP room checks, and repayment of remaining CESG, CLB, and provincial incentives.

Examples

Example: transfer to another provider for the same child

A parent moves an RESP from Bank A to Brokerage B for the same beneficiary. If Brokerage B's RESP is already registered and the promoters handle the transfer properly, CRA says the move will usually have no tax implications. The parent still needs to check transfer fees, grant support, and any processing delays.

Example: sibling transfer into a family RESP

One child does not continue after high school and a younger sibling is already a beneficiary of the receiving family RESP. The transfer may fit the sibling transfer rule, but the family still asks whether CESG, CLB, and any provincial incentive will transfer, be allocated, or be repaid.

Example: partial transfer

A subscriber wants to move only half of an RESP to a new provider. ESDC's guidance says partial transfers can require the same proportion from each notional account balance, except CLB can be handled separately. The family asks both promoters for the exact percentage and account breakdown before approving it.

Example: receiving RESP not registered yet

A family signs new-account paperwork and asks the old promoter to send RESP money immediately. CRA says the receiving plan must already be registered before the transfer. The family waits for written confirmation instead of risking the transfer being treated as an AIP.

Example: child does not attend school and the plan has growth left

A subscriber withdraws their original contributions tax-free after the RESP is no longer needed. The remaining growth cannot simply be taken out tax-free. If the plan qualifies, that growth may be paid as an accumulated income payment, transferred to the subscriber's RRSP within the permitted limit, rolled to an eligible RDSP, or otherwise handled under the promoter's closing process.

A clean RESP transfer checklist

• The receiving RESP is registered before money moves.
• The old plan has not already paid an AIP.
• Both plan contracts allow the transfer.
• The transfer is either for a common beneficiary or fits the sibling rule.
• The receiving promoter receives enough history to track beneficiaries, contributions, refunds, EAPs, AIPs, fees, incentive repayments, transfers, gains, and income.

What can move and what may not

• Personal contributions can move inside a valid RESP-to-RESP transfer or can usually come back tax-free to the subscriber in a contribution refund.
• CESG can transfer only when the eligible-transfer conditions are met; otherwise repayment can be required.
• CLB is beneficiary-specific and has its own transfer conditions. ESDC says subscribers can choose to transfer all, some, or none of the CLB.
• Earnings can move inside a valid RESP transfer, but if the education path has ended they may instead become an AIP, which has tax and timing rules.

RRSP and RDSP rollovers are not ordinary transfers

• For an RRSP route, the amount must qualify as an AIP, the subscriber generally needs available RRSP room, and CRA's guidance points to a $50,000 limit for this AIP transfer path.
• For an RDSP education savings rollover, the RESP and RDSP generally need the same beneficiary, the beneficiary must meet DTC, residency, age, and RDSP-room conditions, and the rollover does not attract Canada disability savings grants.
• When RESP investment earnings roll to an RDSP, Canada.ca says remaining CESG, CLB, and provincial incentives must be repaid and the RESP must be closed before March of the following year.

Questions to ask before signing a transfer form

• Is the receiving RESP already registered, and can you confirm that in writing?
• Is this transfer for the same beneficiary, a sibling in a family plan, or a sibling in an individual plan?
• Will this move cause any CESG, additional CESG, CLB, BCTESG, QESI, or other provincial incentive repayment?
• If this is a partial transfer, what percentage of each account bucket will move and what happens to each CLB account?
• Will the old plan's effective date carry over and affect future contribution, AIP, or termination deadlines?
• What transfer-out fee, transfer-in reimbursement, market-trading restriction, or blackout period applies?

Official sources