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Test your knowledge
You have invested $50,000 in a registered education savings plan (RESP). Along with the grants and investment income, the plan is now worth $75,000. How much of this can your child withdraw tax-free to pay for post-secondary education?
September 4th, 2025
The answer: in theory, $0; in practice, $50,000.
In theory, when withdrawing funds from an RESP, the portion corresponding to the contributions made (in this case, $50,000) can be withdrawn tax-free by the subscriber (you), not the beneficiary (your child). However, in practice, you can request that your refund be paid directly to your child, which will have no tax implications. The portion that corresponds to grants and investment income goes to your child and is fully taxable in his or her hands. Note that in both cases the child must be enrolled in a qualifying post-secondary educational program.
To find out more about RESP withdrawal strategies, read this article.
The following sources were used to prepare this article:
Government of Canada, “Registered Education Savings Plans payments, transferring and rolling over Registered Education Savings Plans property”; “Pay for education using the Registered Education Savings Plan”; “Managing the Registered Education Savings Plan, taxes and transfers.”
