Non-Resident Withdrawal – RESP

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2160 viewsJuly 26, 2018International Tax

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Anonymous Posted July 26, 2018

Continue with the question “What Happens To Your Child’s RESP When You Leave Canada?”. What will happen when I withdraw RESP for my non-resident child college? Is there a 25% tax hold on capital growth and tax hold on $7200 limit? The account owner is non-resident status also.

Thanks

1 Answer

score 0 · Answer 1 · 2018-07-26T20:18:37+00:00

Hi,

I am assuming that your child is a non-resident too. The tax impact for your child (making the withdrawals) has to do with child’s residency status and not your status (parent).

Your child (beneficiary) can receive the original contributions made by his/her parents to the RESP on a tax-free basis. However, withdrawals made that relate to the accumulated investment income retained in the RESP are subject to a 25% withholding tax, unless reduced by a tax treaty.

Note that non-resident children cannot receive payments of CESG (i.e. government grant). If the child is still a non-resident at the time he/she attends college or a university, the CESG must be returned to HRSDC.

Non-Resident Withdrawal – RESP

1 Answer

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