Section 146.1

Subsection 146.1(1)

Subscriber

Paragraph (a)

Administrative Policy

1 September 2020 External T.I. 2019-0832221E5 - Subscriber of an RESP

a corporate charity cannot establish RESPs

Could a charity that is a corporation and is not a public primary caregiver, as defined in s. 146.1(1), qualify as an RESP subscriber? CRA responded

Pursuant to the definitions “subscriber” and “education savings plan” in subsection 146.1(1), only an individual (other than a trust) and a public primary caregiver are eligible to enter into an RESP with a promoter. As the term “individual” … exclude[s] a corporation, the registered charity … would not qualify as an RESP subscriber.

Paragraph (c)

Articles

Cole R. Southall, "Continuing RESPs Beyond the Death of the Subscriber", Canadian Tax Focus (Canadian Tax Foundation), Vol. 8, No. 1, February 2018, p.13

RESP part of subscriber’s estate (p. 13)

Funds invested in an RESP remain the property of the subscriber (the person who established the RESP) until payments are made to or for the benefit of a beneficiary. Thus, on the death of the sole or last subscriber, the RESP will form part of his or her estate….

Estate can defer the arising of income from educational assistance payments (EAPs) (p. 14)

The definition of "subscriber" in section 146.1 includes any other person who acquires the individual's rights as a subscriber under the plan or who makes contributions into the plan in respect of a beneficiary, including the estate of the subscriber. Accordingly, a will can allow the executor or a trustee or other person to acquire the rights of the subscriber under an RESP, or to contribute to the plan on behalf of a beneficiary, in order to continue the plan beyond the death of the testator for the benefit of the beneficiaries of the plan. There is no need to immediately liquidate the RESP and create the associated tax consequences; its continuation, for example, could allow taxation to be deferred and future distributions to qualify as EAPs and be taxed at the RESP beneficiary's low marginal tax rate….

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 146.1 - Subsection 146.1(7.1) an immediate liquidation of an RESP on death is unnecessary 76

Subsection 146.1(3) - Deemed registration

Administrative Policy

1 November 89 Memorandum (April 90 Access Letter, ¶1184)

Where one of the initial subscribers to an RESP paid tax on interest or income from the plan prior to its registration, the retroactive registration of the plan in a subsequent year would not authorize a retroactive claim of a deduction in the calculation of his income tax liability in the year in which the plan became registered.

Subsection 146.1(2.21)

Administrative Policy

10 August 2015 Internal T.I. 2014-0527981I7 - Application of 146.1(2.21) to deceased beneficiary

6 month extension under s. 146.1(2.21), for making EAPs, not available following beneficiary’s death

The beneficiary of an RESP met the requirements of s. 146.1(2)(g.1) immediately before enrolment in the qualified program ceased. Does the six-month extension for making educational assistance payments provided under s. 146.1(2.21) allow for the payment of an EAP “to or for an individual” once the individual in question is deceased? CRA stated:

Where a payment made out of an RESP is not an EAP and also not one of the payments described in paragraphs (c) through (e) in the definition of “trust” in subsection 146.1(1), the payment by definition will be an accumulated income payment (“AIP”). In general AIPs are included in the recipient’s income in the year of receipt and are subject to an additional 20% tax (subject to certain available rollovers). …

[T]he phrase “to or for an individual” in subsection 146.1(2.21) must apply in respect of a living individual and an EAP cannot be paid in respect of a beneficiary once the beneficiary in question is deceased.

Subsection 146.1(7.1)

Articles

Cole R. Southall, "Continuing RESPs Beyond the Death of the Subscriber", Canadian Tax Focus (Canadian Tax Foundation), Vol. 8, No. 1, February 2018, p.13

an immediate liquidation of an RESP on death is unnecessary

A registered education savings plan will form part of the estate of a deceased sole or last subscriber to the RESP. Accordingly, the will can allow the executors to continue the plan beyond the death of the testator for the benefit of the beneficiary (and contribute to the plan on the beneficiary’s behalf). This would permit future distributions to qualify as educational assistance payments and be taxed at the RESP beneficiary's low marginal tax rate.

Subsection 146.1(5) - Trust not taxable

Administrative Policy

IT-308R "Registered Education Savings Plans"

Subsection 146.1(6.1)

Administrative Policy

11 October 2019 APFF Financial Strategies and Instruments Roundtable Q. 10, 2019-0812841C6 F - RESP - Change of subscriber

amounts can be transferred from one RESP to another

Grandfather A, who resides in the U.S., subscribed to a registered education saving plan (‘RESP”) for his Canadian-resident granddaughter, but now wishes for the subscriber to be changed to his son (the girl’s father). The CRA website indicates that it is possible to transfer amounts in a RESP to another RESP with a different subscriber and the same beneficiary. How is this possible given the prohibition under the s. 146.1(1) definition of “subscriber” against changing the subscriber? CRA responded:

Such a transfer will be possible subject to the terms of the arrangement with the promoter. The provisions applicable to RESPs allow the transfer of amounts from one RESP to another. In fact, subsection 146.1(6.1) provides special rules for transfers of property from one RESP to another. …

[P]aragraph [146.1(6.1)(b)] could cause the years of existence of the transferring RESP to be taken into account in determining when "accumulated income payments" may be made under the receiving RESP pursuant to 146.1(2)(d.1). If applicable, those years would also be taken into account in determining the maximum duration of the receiving RESP provided in paragraph 146.1(2)(i) and determining the period during which contributions may be made into the receiving RESP pursuant to paragraph 146.1(2)(h). …

However, depending on the circumstances, a transfer between RESPs could result in the subscriber of the transferring RESP, the receiving RESP, or both, having to pay tax under subsection 204.91(1) … [but not in] the situation described … .

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 204.9 - Subsection 204.9(5) - Paragraph 204.9(5)(e) RESP transferor could be liable under s. 204.91(1) 146