Start Backdating option grants

Backdating option grants

In this case the tax sheltering effects are even more beneficial than for the older kids.

Then you will be saving roughly $120 taxes per year (assume 40% rate on 3% interest).

The interest portion of the account will be taxable in the child’s hand when withdrawn but as long as they are in a lower tax bracket then you will save some tax money.

This benefit is pretty debatable – all it takes is one good summer job and the tax benefit mostly disappears.

I’m not sure that I would bother with an resp for the 18 year old especially if the money is going to be used in the next year or two.

The tax sheltering might still be useful but only in certain cases.

If you are in a high tax bracket (ie 40% ) and will be contributing a significant sum of money – let’s say $10k.

The rules are as follows: RESPs for beneficiaries aged 16 and 17 will be eligible for RESP grants only if at least one of the following conditions is met: From the comment it appears that all the previous resp contributions were withdrawn which makes this child ineligible for any grants.

My previous comment about tax sheltering for the 18 year old are still valid for this child.

Is there anything that would be worthwhile in investing into the RESP now and can it be backdated?? Looks like all 3 will be going to post secondary…2 university for sure. First point (and most important point) is the concept of investing time horizon.

If you are investing money that you need in a couple of years then you have to invest in something that is not risky in order to ensure the money will be there when you need it.

Let’s look at the possibilities for each of her kids: 18 year old The last year the resp contribution grant can be paid is in the year the beneficiary turns 17.