本文发表在 rolia.net 枫下论坛RESPs are tax-deferred savings plans intended to help pay for the postsecondary
education of a child or grandchild. Although contributions to a
plan are not tax-deductible, there is a tax-deferral opportunity since the
income accumulates tax-deferred within the plan. On withdrawal, the payments
will be taxable in the hands of the beneficiary or beneficiaries,
provided that they are enrolled in qualifying educational programs. The
assumption is that, at the time of withdrawal, the beneficiaries or beneficiary
would be in a lower tax bracket than the contributor. Consequently, withdrawals
from the plan should be taxed at a lower rate. In effect, RESPs allow
for some income splitting within a family.
The maximum amount that can be contributed in a single calendar year for
each beneficiary is $4,000. There is a lifetime maximum of $42,000 per
beneficiary. Contributions can be made for up to 21 years but the plan must
be collapsed within 25 years of its starting date. This time limitation requires
contributors to decide when would be the best time to start the plan. Generally,
waiting until the beneficiary is 3 to 4 years old is recommended.
There are two types of RESPs, pooled plans and individual plans. As their
name suggests, pooled or group plans are plans to which a number of subscribers
make contributions for their beneficiaries. The pooled funds are
managed, usually conservatively, by the plan administrators. Annual contributions
are generally pre-set. Under group plans, the administrator
determines the amount paid out to beneficiaries.
Individual, or self-directed plans, are administered by a number of institutions
including banks, mutual fund companies, and investment brokers.
Contributions tend to be more flexible and contributors can participate in
both the investment and distribution decisions.
More than one beneficiary can be named in any particular plan. These
“family” plans are used by families with more than one child. If one of the
named beneficiaries does not pursue post-secondary education, all of the
income can be directed to the beneficiaries who do attend.
There has always been a concern with RESPs since it has not been possible
under the income tax laws to claim the income generated tax-free under the
plan if the beneficiary did not attend a qualifying program. It has only been
possible to reclaim the invested capital. Since 1998, the contributor (versus the
beneficiary) now is allowed to withdraw the income from an RESP provided
that the plan has been in existence more than 10 years and that none of the
named beneficiaries has started qualified post-secondary programs by age 21.
As well, contributors are allowed to transfer a maximum of $50,000 of this
income to their RRSPs if the beneficiaries do not attend qualifying programs.
This is dependent on there being sufficient contribution room remaining in
the RRSP. Any withdrawals of tax-deferred income in excess of amounts that
can be transferred to an RRSP will be subject to a penalty tax of 20% in
addition to regular income tax.
If the contributor (as opposed to the beneficiary) starts to withdraw income
from the RESP, the plan must be terminated by February 28 of the following
year.
Canada Education Savings Grants (CESGs) now provide further incentive to
invest in RESPs. Effective January 1, 1998, the federal government will
make a matching grant of 20% of the first $2,000 contributed each year to
the RESP of a child under 18. Worth up to $400 per year, this grant is
forwarded directly to the RESP firm and does not count towards the contributor’s
annual or lifetime contribution limit. Unused grant room can be
carried forward from year to year, up to a total of $7,200 grant per child. For
example, if a parent contributes $1,350 to her child’s RESP in 1998, the
government will contribute an extra $270, or 20% of $1,350. The leftover
grant room of $130 ($400 - $270) can then be used in later years. CESGs
must be repaid if the child does not go on to a qualifying post-secondary
institution.更多精彩文章及讨论，请光临枫下论坛 rolia.net
education of a child or grandchild. Although contributions to a
plan are not tax-deductible, there is a tax-deferral opportunity since the
income accumulates tax-deferred within the plan. On withdrawal, the payments
will be taxable in the hands of the beneficiary or beneficiaries,
provided that they are enrolled in qualifying educational programs. The
assumption is that, at the time of withdrawal, the beneficiaries or beneficiary
would be in a lower tax bracket than the contributor. Consequently, withdrawals
from the plan should be taxed at a lower rate. In effect, RESPs allow
for some income splitting within a family.
The maximum amount that can be contributed in a single calendar year for
each beneficiary is $4,000. There is a lifetime maximum of $42,000 per
beneficiary. Contributions can be made for up to 21 years but the plan must
be collapsed within 25 years of its starting date. This time limitation requires
contributors to decide when would be the best time to start the plan. Generally,
waiting until the beneficiary is 3 to 4 years old is recommended.
There are two types of RESPs, pooled plans and individual plans. As their
name suggests, pooled or group plans are plans to which a number of subscribers
make contributions for their beneficiaries. The pooled funds are
managed, usually conservatively, by the plan administrators. Annual contributions
are generally pre-set. Under group plans, the administrator
determines the amount paid out to beneficiaries.
Individual, or self-directed plans, are administered by a number of institutions
including banks, mutual fund companies, and investment brokers.
Contributions tend to be more flexible and contributors can participate in
both the investment and distribution decisions.
More than one beneficiary can be named in any particular plan. These
“family” plans are used by families with more than one child. If one of the
named beneficiaries does not pursue post-secondary education, all of the
income can be directed to the beneficiaries who do attend.
There has always been a concern with RESPs since it has not been possible
under the income tax laws to claim the income generated tax-free under the
plan if the beneficiary did not attend a qualifying program. It has only been
possible to reclaim the invested capital. Since 1998, the contributor (versus the
beneficiary) now is allowed to withdraw the income from an RESP provided
that the plan has been in existence more than 10 years and that none of the
named beneficiaries has started qualified post-secondary programs by age 21.
As well, contributors are allowed to transfer a maximum of $50,000 of this
income to their RRSPs if the beneficiaries do not attend qualifying programs.
This is dependent on there being sufficient contribution room remaining in
the RRSP. Any withdrawals of tax-deferred income in excess of amounts that
can be transferred to an RRSP will be subject to a penalty tax of 20% in
addition to regular income tax.
If the contributor (as opposed to the beneficiary) starts to withdraw income
from the RESP, the plan must be terminated by February 28 of the following
year.
Canada Education Savings Grants (CESGs) now provide further incentive to
invest in RESPs. Effective January 1, 1998, the federal government will
make a matching grant of 20% of the first $2,000 contributed each year to
the RESP of a child under 18. Worth up to $400 per year, this grant is
forwarded directly to the RESP firm and does not count towards the contributor’s
annual or lifetime contribution limit. Unused grant room can be
carried forward from year to year, up to a total of $7,200 grant per child. For
example, if a parent contributes $1,350 to her child’s RESP in 1998, the
government will contribute an extra $270, or 20% of $1,350. The leftover
grant room of $130 ($400 - $270) can then be used in later years. CESGs
must be repaid if the child does not go on to a qualifying post-secondary
institution.更多精彩文章及讨论，请光临枫下论坛 rolia.net