Subsection 146.1(1)
Post-Secondary Educational Institution
Administrative Policy
17 August 2005 External T.I. 2005-0135911E5 F - REEE- Établissement d'enseignement à l'étranger
Must a U.S. post-secondary institution be listed in the current edition of the Accredited Institutions of Postsecondary Education published by the American Council on Education in order to qualify as a designated eligible institution for purposes of the definition of post-secondary educational institution? CRA responded:
[T]here is no requirement in the Act for a foreign educational institution to be listed in the Accredited Institutions of Postsecondary Education published by the American Council on Education. However, a foreign educational institution that is [so] listed … will be recognized as a "post-secondary educational institution" … .
However, it is the RESP promoter's responsibility to ensure that educational assistance payments under the plan are made in accordance with the conditions of registration set out in paragraph 146.1(2)(g.1). …
… If a promoter wishes to obtain confirmation that a foreign educational institution is recognized for the purposes of section 146.1, it may make a request to the following address: ….
Subscriber
Paragraph (a)
Administrative Policy
1 September 2020 External T.I. 2019-0832221E5 - Subscriber of an RESP
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)
Administrative Policy
14 March 2007 External T.I. 2006-0169821E5 F - REÉÉ - définition de souscripteur
Can an RESP have more than one subscriber after the death of the original subscriber? CRA responded that if the:
plan was an arrangement entered into on or after 1988, paragraph (c) of the definition of subscriber ensures that any person who acquires the deceased subscriber's rights becomes a subscriber after the death. If more than one person acquires the rights of the deceased subscriber, each of those persons becomes a subscriber after death.
3 August 2005 External T.I. 2005-0118891E5 F - REÉÉ - Décès du souscripteur
The deceased, who was a subscriber to an RESP of which his two-year old child was the beneficiary, devised and bequeathed all his property to a trust for the benefit of that child. Regarding the transfer of the RESP to the testamentary trust, CRA stated:
[A] subscriber … includes each individual, other than a trust (the "original subscriber") who has subscribed to the plan with the promoter and, after the death of that individual, any other person (including the estate of the original subscriber) who acquires the individual's rights as a subscriber to the plan … .
…[I]f a trust acquires rights from the original subscriber after the original subscriber’s death as a subscriber to the plan, or if a testamentary trust makes contributions to the RESP after the death of the original subscriber, that trust will be a subscriber … .
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 | 78 |
Trust
Paragraph (d)
Administrative Policy
15 February 2007 External T.I. 2006-0216851E5 F - REÉÉ - Définition de fiducie
CRA declined to answer in a non-ruling context whether a person who irrevocably holds property in an RESP can have some control over the use of RESP proceeds by an educational institution described in para. (d) of the definition of trust.
Subsection 146.1(2)
Administrative Policy
29 October 2003 External T.I. 2003-0037435 F - REMBOURSEMENT DE PAIMENTS D'UN REEE
In confirming that a subscriber of an RESP may assign the right to repayment of payments or to give it as security for a loan of money, CRA stated:
Such transactions by the subscriber do not contravene the provisions of the Act so that they would not in themselves result in the revocation of the registration of the plan to the extent that there is no change of subscriber.
Paragraph 146.1(2)(g.2)
Administrative Policy
Frequently asked questions for the Registered Education Savings Plans (RESPs) 7 November 2024
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.
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
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)
Administrative Policy
25 February 2021 Internal T.I. 2020-0865641I7 - Settlement Payments to Registered Plans
After noting that it is CRA’s policy to consider that a settlement payment made to an RRSP or RRIF respecting an actionable loss suffered by it will not be treated as a contribution to the plan, nor as such a contribution or a taxable benefit to the annuitant if the damages are paid to the annuitant but are paid over to the plan by the later of the year end and six months after receipt, the Directorate confirmed that there also will be no adverse tax consequences where a settlement payment is made to an RESP, or indirectly by the subscriber returning the payment to the plan within the timeframe applicable to the RRSP policy (it will not be treated as a contribution).
If the settlement payment was made to the subscriber without being so returned, it would be an accumulated income payment (AIP) and would be included in the subscriber’s income under s. 146.1(7.1). As an AIP, it might also be subject to additional tax under Part X.5.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 146 - Subsection 146(8) | damages payment received by annuitant is not a benefit if paid over to the RRSP by year end | 253 |
| Tax Topics - Income Tax Act - Section 207.01 - Subsection 207.01(1) - Unused TFSA Contribution Room - Paragraph (b) - Element D | damages payments made to a TFSA are not treated as a contribution | 143 |
| Tax Topics - Income Tax Act - Section 146.4 - Subsection 146.4(6) | RDSP damages paid to and retained by the beneficiary would be taxable | 220 |
| Tax Topics - Income Tax Act - Section 207.01 - Subsection 207.01(1) - Registered Plan Strip | advantage if RDSP damages are received by a holder who is not a beneficiary | 220 |
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
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.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 146.1 - Subsection 146.1(1) - Subscriber - Paragraph (c) | 222 |
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
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 |