How to best withdraw funds from a large RESP with minimal tax.

By Jamie Golombek

Each year around this time, I’m inundated with questions about strategies to tax-effectively withdraw funds from a registered education savings plan (RESP). Given the bull market of the past decade, some parents have noticed that there are substantial funds in their RESP and wonder if there are some strategies that could be employed to withdraw those funds with minimal (or, in some cases, zero) tax.

Before delving into a strategy, let’s walk through the RESP basics. An RESP is a tax-deferred savings plan that allows parents (or others) to contribute up to $50,000 per child toward saving for post-secondary education. The addition of government money in the form of Canada Education Savings Grants (CESGs) can add up to $7,200 per child to the plan.

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