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Canada Education Savings Regulations

Version of section 11 from 2019-09-01 to 2020-09-09:

  •  (1) Subject to subsection (2), if assisted contributions are withdrawn from an RESP, other than by way of transfer to another RESP, when no beneficiary under the RESP is eligible to receive an EAP, the trustee under the RESP shall, within the period set out in the trustee agreement that applies to the RESP, repay to the Minister an amount equal to the lesser of

    • (a) the amount determined by the formula

      A/B × C

      where

      A
      is the balance in the grant account of the RESP immediately before the withdrawal,
      B
      is the balance of the total assisted contributions in the RESP immediately before the withdrawal, and
      C
      is the amount of assisted contributions withdrawn, and
    • (b) the balance in the grant account of the RESP immediately before the withdrawal.

  • (2) A trustee under an RESP is not required to repay any amount of a CES grant paid in respect of a beneficiary if there is a withdrawal of contributions and the withdrawal is all or part of an excess amount of contributions to reduce the amount of tax payable under Part X.4 of the Income Tax Act, and, at the time of the withdrawal, the excess amount for the year is not greater than $4,000.

  • (3) A trustee under an RESP shall repay to the Minister, within the period set out in the trustee agreement that applies to the RESP, an amount referred to in subsection (4), if

    • (a) the RESP is terminated;

    • (b) the registration of the RESP is revoked;

    • (c) a payment described in paragraph (b) or (d) of the definition trust in subsection 146.1(1) of the Income Tax Act is made under the RESP;

    • (d) an EAP is made under the RESP to an individual who is not a beneficiary under the RESP;

    • (e) property is transferred from the RESP to another RESP except where the transfer is an eligible transfer; or

    • (f) an individual becomes a beneficiary under the RESP in place of another beneficiary, except where paragraph 204.9(4)(b) of the Income Tax Act applies in respect of the replacement.

  • (4) The amount that must be repaid as the result of an occurrence of an event described in subsection (3) is the lesser of

    • (a) the total of the balance in the grant account and all of the CLB accounts of the RESP immediately before the time of the occurrence, and

    • (b) the amount determined by the formula

      (C × Y)/(Y + G)

      where

      C
      is the fair market value of the property held in the RESP, determined immediately before the time of the occurrence,
      Y
      is the total balance in the grant account and all of the CLB accounts of the RESP immediately before the time of the occurrence, and
      G
      is the total balance in the RESP immediately before the time of the occurrence, of the amounts that were paid into the RESP under a designated provincial program.
  • (5) If an amount has been paid into an RESP under subsection 5(4) of the Act and an individual, who is not a brother or sister of all of the other beneficiaries under the RESP, becomes a beneficiary under the RESP, the trustee shall repay to the Minister, within the period set out in the trustee agreement that applies to the RESP, the lesser of

    • (a) the balance of the grant account of the RESP immediately before the individual becomes a beneficiary, and

    • (b) the fair market value of the property held in connection with the RESP immediately before the individual becomes a beneficiary.

  • (6) If a beneficiary in respect of whom a CLB was paid into an RESP ceases to be a beneficiary under the RESP, the trustee shall repay to the Minister, within the period set out in the trustee agreement that applies to the RESP, the lesser of

    • (a) the balance of the beneficiary’s CLB account immediately before the beneficiary ceases to be a beneficiary, and

    • (b) the fair market value, immediately before the beneficiary ceases to be a beneficiary, of the property held in connection with the RESP less the total of the balances of the CLB accounts in the RESP for all other beneficiaries.

  • (7) If a CLB has been paid into an RESP and an individual, who is not a brother or sister of every other beneficiary under the RESP, becomes a beneficiary under the RESP, the trustee shall repay to the Minister, within the period set out in the trustee agreement that applies to the RESP the lesser of

    • (a) the total of the balances of the CLB accounts in the RESP immediately before the individual becomes a beneficiary, and

    • (b) the fair market value, immediately before the individual becomes a beneficiary, of the property held in connection with the RESP.

  • (8) If an amount of a CLB or CES grant is repaid to the Minister, the trustee shall debit that amount from the CLB account or grant account, as the case may be, at the time of the repayment.

  • SOR/2018-275, s. 5
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