WHAT HAPPENS WHEN RESP MATURES?
When it is time for your child to go to university, you can withdraw your savings tax-free. The remaining portion of RESP (consists of growth of your savings, CESG contributions and CESG growth) is withdrawn in one or more installments. These are then taxed in the hands of your child. Since your child may not have any other income he/she may be taxed, if at all, at the lowest rate. The RESP money can be used for studies anywhere in the world.
