Tax payable on an advantage

An advantage for an RDSP is any benefit or loan that depends on the existence of the RDSP (subject to exceptions listed below). A tax is payable for a calendar year if, in the year, an advantage for an RDSP is extended to any person who is, or does not deal at arms' length with, a beneficiary under, or a holder of, the plan. Generally, an advantage does not include:

• disability assistance payments;
• contributions made by or with the consent of a holder;
• RDSP to RDSP transfers;
• grants and bonds;
• administrative and investment services associated with an RDSP; or
• loans used to make contributions to an RDSP.

Amount of tax payable

The amount of tax payable for an advantage is:

• in the case of a benefit, the fair market value of the benefit; and
• in the case of a loan, the amount of the loan.

Payment of tax

Each person who is a holder of an RDSP is jointly liable for the tax. Where two or more holders of an RDSP are jointly liable to pay the tax, Form RC4532, Individual Tax Return for Registered Disability Savings Plan (RDSP), must be filed with a payment for any balance due no later than 90 days after the end of the calendar year. Only one Form RC4532 needs to be filed on behalf of all the holders that are liable for the tax.

Date modified:

2016-12-01