What occurs to your RESP if you depart Canada?

The Registered Education Savings Plan (RESP) in Canada offers parents and guardians a valuable means to save for their children’s higher education. However, life’s uncertainties may lead to situations where leaving Canada becomes necessary.

In this article, we’ll delve into what occurs with your RESP in such circumstances. We’ll examine the regulations and advantages tied to RESP in Canada, providing insight into the ramifications of relocating abroad.

Exploring the RESP: Regulations and Advantages

Aspect Description
RESP Basics
  • A tax-advantaged savings plan tailored for higher education expenses.
  • This provision enables contributions, government grants, and tax advantages.
Government Grants
  • Incorporates the Canada Education Savings Grant (CESG)
  • Canada Learning Bond (CLB)
Tax-Deferred Growth
  • Investments accrue tax-free until they’re accessed for educational purposes.
  • Taxing at the beneficiary’s reduced income tax rate.

To comprehend the implications of leaving Canada on your RESP, it’s essential to first grasp the rules and benefits associated with RESPs in Canada.

RESP Basics:

An Registered Education Savings Plan is a savings plan designed to help finance your child’s higher education, offering advantageous tax benefits. Through contributions, families can access government grants and enjoy tax-deferred growth, making it a popular choice among Canadian households.

Government Grants:

An Registered Education Savings Plan offers substantial benefits, notably through access to government grants such as the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB). These grants play a vital role in augmenting your savings for your child’s education.

Tax-Deferred Growth:

Investments made in RESP accounts accumulate tax-free until they are withdrawn for educational purposes. This tax deferral feature can enhance the growth of your savings over time.

What occurs to an RESP if you depart Canada?

Scenario RESP Type Consequences
Leaving Canada temporarily Non-contributory


There are no penalties, and government grants remain accessible.

You can continue contributing to your RESP with a valid SIN. Additionally, please ensure to update your contact information as necessary.

Leaving Canada permanently Non-contributorySelf-contributory No penalties will be imposed, and grants will be accessible globally.

Explore alternatives for imposing restrictions in the absence of a valid SIN.

Terminating the RESP Any type Tax implications arise when repaying grants, as this may affect taxable income.
Transferring to a Family Member Any type Possible if Canadian

resident family member

Certainly! If you opt to leave Canada, the fate of your Registered Education Savings Plan hinges on various factors, including your individual circumstances and the nature of your RESP account. This is a crucial inquiry, given that RESP is tailored for saving toward your child’s post-secondary education within the Canadian framework.

RESP with no contribution:

If you have a non-contributory Registered Education Savings Plan, which means only government grants were deposited into the account, you won’t face penalties if you leave Canada. This type of RESP mainly consists of funds from government grants like the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB). These grants are meant to support your child’s education, regardless of where you live.

Essentially, these government grants are a gift to your child’s education fund and aren’t dependent on your residency status. Even if you permanently leave Canada, the grants will stay safely within the RESP. This means your child can access these funds for post-secondary education, whether they study in Canada or abroad. The flexibility to use these funds is a key advantage of a non-contributory RESP.

Self-Contributory RESP:

If you have a self-contributory Registered Education Savings Plan, where you’ve personally added funds alongside government grants, things get more complex if you leave Canada temporarily. Generally, you can maintain the RESP and keep contributing with a valid Canadian Social Insurance Number (SIN). Just update your contact info with your RESP provider if you leave temporarily.

However, if your departure becomes permanent and you lose your valid SIN, contributing to the Registered Education Savings Plan may get restricted. SIN serves as the Canadian government’s tool to identify and track RESP holders, making contributions and accessing full Registered Education Savings Plan benefits simpler with a valid one.

Ending the Registered Education Savings Plan (RESP):

If you find yourself permanently leaving Canada, terminating your RESP may become necessary. However, this decision can carry tax implications that shouldn’t be overlooked.

When ending an Registered Education Savings Plan, you might need to repay any government grants received over the years, especially if the beneficiary (your child) doesn’t pursue post-secondary education within a certain timeframe.

Furthermore, any earnings accrued within the RESP will be subject to taxation. Hence, it’s vital to assess the financial consequences of terminating the RESP thoroughly. Seeking advice from a tax professional or financial advisor is advisable in such situations.

Transfer to a Family Member:

In some cases, you might have the option to transfer your RESP to a sibling or another family member who is a Canadian resident. This allows you to keep the funds saved for your child’s education within the family and continue supporting educational pursuits in Canada. It’s crucial to understand the specific rules and eligibility requirements for such transfers, as they can vary depending on your Registered Education Savings Plan provider and the circumstances.

When you leave Canada, what happens to your RESP depends on several factors, including the type of RESP you have, the account you hold, and whether your departure is temporary or permanent. RESP accounts primarily consisting of government grants offer more flexibility, as these funds aren’t tied to your residency status. However, temporary absences might allow you to maintain self-contributed RESPs, whereas permanent departures could result in restrictions and tax implications.

While terminating the Registered Education Savings Plan is an option, it comes with potential repayment obligations and tax consequences, so it’s essential to carefully consider your choices. Transferring the RESP to a Canadian family member is another option to ensure that the educational funds continue benefiting your loved ones within Canada’s education system. It’s advisable to seek advice from financial experts or RESP providers when facing these decisions to ensure you make the best choices for your Registered Education Savings Plan.

Concluding the Matter

Understanding the ins and outs of Registered Education Savings Plans (RESP) in Canada is crucial for securing your child’s future education. Whether you have a non-contributory RESP or a self-contributory one, being well-informed about Registered Education Savings Plan rules, especially in the context of leaving Canada, empowers you to make the best decisions for your family’s educational savings.

Here’s how you can take action:
  • Stay Informed: Stay updated on Registered Education Savings Plan rules and regulations, particularly if you’re planning to leave Canada, whether temporarily or permanently.
  • Consult a Professional: If you have specific questions or concerns regarding your RESP and its implications for leaving Canada, consider seeking advice from a financial advisor or RESP provider for tailored guidance.
  • Share Knowledge: Spread the knowledge you’ve acquired with friends and family who may benefit from this information. Education is invaluable, and your shared insights could help others make informed decisions about their RESPs.
  • Plan Ahead: If you’re contemplating leaving Canada, plan ahead to ensure a seamless transition for your RESP and your child’s education savings.

Remember, a Registered Education Savings Plan (RESP) is a valuable tool for safeguarding your child’s future education, and taking proactive steps can significantly impact your savings efforts. Thank you for reading, and best of luck with your endeavors to save for your child’s education!

The provided information serves purely informative purposes and represents the opinions of Super Visa Insurance, subject to change without notice. It is not intended as financial or legal advice and should not be construed as such. Super Visa Insurance Monthly bears no responsibility for actions taken based on the content of this material. While efforts are made to ensure accuracy and currency, certain terms, conditions, limitations, exclusions, termination clauses, and other policy details may not be fully outlined here, which could impact policy selection. For comprehensive information, please consult the official policy documents. In the event of any discrepancies, the language within the official policy documents shall prevail. All rights reserved.

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