RDSP

Key features of RDSPs

A Registered Disability Savings Plan (RDSP) is a means of supporting those who are disabled and in receipt of Disability Tax Credit to save for the future.  Here are some important things to know about these savings plans:

  • The person who is registered as disabled and who will benefit from the savings in the future is known as the beneficiary.
  • The person who opens and manages the plan on an ongoing basis is known as the plan holder. The beneficiary and plan holder can be the same person or different people.
  • Payments can be made into the RDSP until the beneficiary is 59 years of age.
  • Holding an RDSP does not mean that a beneficiary is no longer eligible to receive disability benefits.
  • There is a lifetime contribution ceiling of $200,000 into the plan but there isn’t an annual cap on the value of contributions.
  • While there is no tax due on the investment earnings as long as they remain in the plan and are not withdrawn, the contributions are not tax deductible.
  • There are a couple of federal schemes i.e.: the Canada Disability Savings Grant and the Canada Disability Savings Bond, which the beneficiary may be eligible to receive government contributions into the RDSP from.
  • Regular payments must be taken from the plan by the time the beneficiary reaches the age of 60.
  • The savings held in the plan can be invested in a variety of different ways, depending on where the plan is opened.
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Latest News

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On April 16, 2024, Canada's Deputy Prime Minister and Finance Minister, Chrystia Freeland, presented the federal budget. While there are no changes to federal personal or corporate tax rates, the budget introduces: • An increase in the portion of capital gains subject to tax, rising from 50% to 66.67%, starting June 25, 2024. However, individual gains up to $250,000 annually will retain the 50% rate. • The lifetime exemption limit for capital gains has been raised to $1.25 million. Additionally, a new one-third inclusion rate is set for up to $2 million in capital gains for entrepreneurs. • The budget confirms the alternative minimum tax changes planned for January 1, 2024 but lessens their impact on charitable contributions. • This year's budget emphasizes making housing more affordable. It provides incentives for building rental properties specifically designed for long-term tenants. • Introduces new support measures to aid people buying their first homes. • Costs for specific patents and tech equipment and software can now be written off immediately. • Canada carbon rebate for small business

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