RESP anti-bypass rule
The regulation provides for special taxation on certain profits that improperly exploit the taxable features of the RESP, as well as special taxation on prohibited and non-qualifying investments.
Each RESP participant is jointly and severally liable for any prohibited investments, ineligible investments, and taxes on profits as described below. If two or more of her applicants to the RESP are jointly and severally liable for the payment of such taxes, he must submit only one form on behalf of all taxable applicants.
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How an RESP works