How to use this page: Read the simplified explanation first, then use the official links below before acting.
Plain-language summary
- Most RESP-to-RESP transfers are not taxable when the two plans share a beneficiary, or when the transfer fits the sibling rules.
- A transfer can still create problems if the receiving plan is not already registered, if the beneficiary setup is wrong, or if grant repayment rules are triggered.
- Leftover RESP growth is not treated the same as personal contributions. It may become an accumulated income payment, which is taxable and can face an extra 20% tax, or 12% for Quebec residents.
- Some leftover RESP earnings can move to an RRSP or eligible RDSP instead of being paid out in cash, but the government conditions are strict.
Action steps
- Before requesting a transfer, confirm that the receiving RESP is already registered and ask the new promoter how they will preserve contribution and grant history.
- Check whether the two plans have the same beneficiary or whether the transfer depends on the sibling rule, because that is what usually decides whether the transfer stays non-taxable.
- If the child may not use the RESP for school, separate the account into three buckets before acting: personal contributions, grants, and growth.
- Ask the promoter whether leftover growth would be paid as an accumulated income payment, transferred to an RRSP, rolled to an RDSP, or lost back to the government.
- Get the provider's fee schedule and timing in writing before moving the plan, because the tax rule and the provider process are two different issues.
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 transfer.
- A transfer can carry the old plan's effective date into the new plan. That matters for how long the RESP can stay open and when accumulated income payments can start.
- Moving money between siblings is not automatically harmless. CRA notes some individual-plan sibling transfers can trigger repayment of CESG and CLB, especially when the receiving sibling is over age 20.
- Personal contributions can usually come back tax-free, but grants are generally repaid when a plan closes unless they were already paid out properly as EAPs.
- An accumulated income payment can usually go only to one subscriber at a time, and joint AIP payments are not allowed.
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: 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.
What this means in real life
- The word transfer sounds simple, but RESP transfers preserve old history instead of starting from zero.
- That history includes contribution dates, grant history, and sometimes the old plan's effective date.
- The safest move is to treat a transfer as an administrative project, not just an investment switch.
When accumulated income payments show up
- AIPs are usually the leftover earnings in an RESP after the education path did not work out or the plan reached its later-stage limits.
- CRA says an AIP is reported on a T4A slip and taxed as income to the recipient, with an extra tax unless the amount is properly offset through an eligible RRSP, PRPP, or SPP transfer.
- The common shortcut is wrong: you cannot assume all unused RESP money can just be moved into an RRSP without first meeting the AIP rules.
Questions to ask before signing a transfer form
- Is the new RESP already registered and ready to receive the transfer?
- Will this move cause any CESG, CLB, or provincial grant repayment?
- Will the old plan's effective date carry over and affect future deadlines?
- What transfer-out fee, transfer-in reimbursement, or blackout period applies?
- If the transfer is between siblings or between different subscribers, what exact rule is the promoter relying on?