RDSP limits and transfers

What is the contribution limit for RDSPs?

There is no annual limit on amounts that can be contributed to an RDSP of a particular beneficiary in a given year. However, the overall lifetime limit for a particular beneficiary is $200,000. Contributions are permitted until the end of the year in which the beneficiary turns 59.

Note
Amounts directly transferred from a beneficiary's RDSP to another RDSP for the same beneficiary do not count toward the $200,000 overall contribution limit.

Transfers

A transfer from one RDSP to another can be made only under the following conditions:

• the transfer must be made from a beneficiary's RDSP to another RDSP for the same beneficiary;
• a transfer can only be made if all holders of the current RDSP agree to the transfer; and
• all funds must be transferred from the current RDSP to the new RDSP.

If the transfer to the new RDSP is not done within 120 days from the date the new RDSP contract is signed, the new RDSP will be considered invalid and the previous RDSP will continue as the ongoing plan.

Effective July 1, 2011, for deaths occurring after March 3, 2010, the existing registered retirement savings plan (RRSP) rollover rules are extended to allow a rollover of a deceased individual's RRSP proceeds to the registered disability savings plan (RDSP) of the deceased individual's financially dependent child or grandchild with an impairment in physical or mental functions. A qualifying beneficiary is referred to as an eligible individual. These rules also apply to registered retirement income fund (RRIF) proceeds, to certain lump-sum amounts paid from registered pension plans (RPPs) and, under proposed changes, to the Saskatchewan Pension Plan (SPP).

In addition, when the death of an RRSP annuitant occurred after 2007 and before 2011, special transitional rules allow a contribution to be made to the RDSP of a financially dependent child or grandchild of the annuitant that has an impairment in physical or mental functions. To be eligible, the contribution to an RDSP can only be made after June 30, 2011, and, when the death of the annuitant occurs after 2007 and before 2011, the contribution must be made before 2012.

RDSP rollover reporting

The amount of the rollover will be shown in box 28 of a T4RSP slip. This amount has to be reported on the deceased annuitant's tax return on line 129 and the amount transferred on line 232. For the eligible individual, the amount has to be reported on line 129 and the amount of the transfer on line 232. Form RC4625, Rollover to a Registered Disability Savings Plan (RDSP) Under Paragraph 60(m), must be attached to the deceased annuitant's and the eligible individual's tax returns. A T4RSP slip will not be issued when the source of rollover proceeds is a RRIF, a RPP, or the SPP.

In these situations, you will not have to complete a Schedule 7, RRSP Unused Contributions, Transfers, and HBP or LLP Activities. However, you must attach to the return the receipt showing the amount of the rollover.

Note
RDSP issuers may produce and use their own method of documentation for this transaction.

Eligible individual

An eligible individual is a child or grandchild of a deceased annuitant under an RRSP or RRIF, or of a deceased member of an RPP or specified pension plan, who was financially dependent on the deceased for support, at the time of the deceased's death, by reason of physical or mental infirmity. The eligible individual must also be the beneficiary under the RDSP into which the eligible proceeds will be paid.

Forms and publications

• Form RC4625, Rollover to a Registered Disability Savings Plan (RDSP) Under Paragraph 60(m)