Can Parents Transfer Their RRSP to Their Kids Tax-Free? Every Way to Move RRSP Money in Canada

A few weeks ago my in-laws asked me a question I didn't have a good answer to. They have more in their RRSPs than they think they'll need. As they are getting close to 71, they wanted to know if they could just move some of it into our RRSPs instead. Same family, same money, different account. Surely there's a form for that?

There isn't. But the question turned out to be a lot more interesting than "no," because there is a way to move the money that can come out close to tax-neutral - and in the right situation, actually save the family money. There's also a version of it that quietly costs you thousands.

So I went through the CRA rules for every way RRSP money can move from one plan to another, which ones work between family members, and exactly what paperwork each one needs. If you've read the RRSP post and the spousal RRSP post, this is the natural next chapter.

Let's break it down...and sorry for the length of this post. There is lots of info!

The Short Answer

There is no way for a living parent to transfer RRSP money directly into a child's RRSP tax-free. Not to a child, not to a child-in-law, not to a grandchild. There is no CRA form for it because the Income Tax Act doesn't allow it.

An RRSP belongs to one person, the annuitant, and the tax deferral belongs to that person too. While they're alive, the only tax-free ways for RRSP money to leave their name are to their own spouse on a separation, or into another plan that's still in their own name.

What does work is a three-step workaround:

1. The parent withdraws the money and pays tax on it
2. The parent gifts the after-tax cash to the child
3. The child contributes it to their own RRSP and claims a deduction

Whether that's a good idea comes down to one comparison - the parent's marginal tax rate versus the child's. If the parent is in a lower bracket than the child, the family comes out ahead. If it's the other way around, the family loses money doing it. I'll show both with numbers below.

But first, the full list of ways RRSP money can legally move, because it explains why the family route doesn't exist.

Every Way to Move Money From One RRSP to Another (or at least the ways I found)

The CRA's word for these is a direct transfer. The key word is direct - the money goes from one financial institution straight to the other, never touching your bank account. If you withdraw cash and re-deposit it yourself, it's not a transfer. It's a taxable withdrawal followed by a brand-new contribution that uses up room.

Here's every legitimate route.

1. Between your own plans - Form T2033

This is the everyday one. Moving your RRSP from your bank to a discount brokerage, consolidating two RRSPs into one, or moving an RRSP into your own RRIF.

• Form: T2033, Direct Transfer. Many institutions use their own version of the form instead, which is fine.
• Who signs: You, as the annuitant. The receiving institution usually starts the process.
• The rule: The receiving plan has to have the same annuitant. That's the whole reason it can't be used to move money to your kids - the annuitant would change.
• Tax: None. No withholding, no slip as income, no effect on your contribution room.
• Watch out for: Transfer-out fees (the sending institution often charges one, and some receiving brokers will reimburse it) and whether the transfer is in cash or in kind. In-kind keeps your investments invested.

2. Into your own RRIF at 71 - also a T2033

By December 31 of the year you turn 71, every RRSP has to be withdrawn, transferred to a RRIF, or used to buy an annuity. The RRIF conversion is just another direct transfer between plans with the same annuitant. No tax on the transfer itself. You only pay tax as money comes out of the RRIF.

This is the part my in-laws were missing, and I suspect a lot of people miss it: turning 71 is not a deadline to get money out. It's a deadline to convert, which I explained to them and told them to just enjoy their money. Nothing forces you to cash out an RRSP at 71. You switch to a RRIF, and from the following year you have to take a minimum amount out each year. Everything else keeps growing tax-deferred.

There was talk in 2025 about loosening these rules - an election promise to cut the RRIF minimum by 25% for a year, and industry groups pushing to raise the conversion age. The minimum cut was officially dropped in November 2025, and as of this writing, 71 is still the age and the minimum withdrawal table hasn't changed.

3. To a spouse on separation - Form T2220

This is the only way RRSP money can move tax-free from one living person to another.

• Form: T2220, Transfer from an RRSP, RRIF, PRPP or SPP to Another RRSP, RRIF, or SPP on Breakdown of Marriage or Common-law Partnership.
• The rule: You have to be living separate and apart, and the transfer has to be under a court order, decree, judgment, or a written separation agreement dividing property.
• Tax: None. The receiving spouse becomes the annuitant and pays tax when they eventually withdraw.

It does not work for "we're still happily married but want to rebalance our RRSPs." For that, see the spousal RRSP post - which is the legitimate way to shift future RRSP savings between spouses, and pension income splitting at 65 for shifting the income.

4. On death - the refund of premiums rollover

When an RRSP or RRIF holder dies, the default rule is harsh - the CRA treats them as having cashed out the entire plan immediately before death. The full value gets added to their income on the final tax return. On a big RRSP, a lot of that gets taxed at the top bracket - over 50% in most provinces.

The exception is when the money goes to a qualifying survivor, who can roll it into their own registered plan without the tax hit. CRA defines that narrowly:

"Financially dependent" has a specific meaning. The child or grandchild generally has to have lived with and depended on the parent, and had net income in the prior year below the basic personal amount (or below the basic personal amount plus the disability amount if they have an impairment). A working adult child doesn't come close.

The paperwork:

• Spouse named as sole beneficiary: If everything goes directly into the spouse's plan by the end of the year after death, it's handled by the institutions and the spouse gets a receipt to claim the deduction.
• Money paid through the estate instead of a named beneficiary: The executor and the qualifying survivor jointly file Form T2019 (for an RRSP) or Form T1090 (for a RRIF) to designate it as a refund of premiums.
• Rollover to an RDSP: Form RC4625, attached to both the deceased's and the child's returns. Capped at the $200,000 RDSP lifetime limit.
• Deadline: The rollover has to happen in the year the money is received or within 60 days after year-end. The survivor has to be 71 or younger at the end of that year to use an RRSP.

The CRA's info sheet RC4177, Death of an RRSP Annuitant, has the full detail if you ever need it.

So for the typical family - parents who are a couple, kids who are working adults - the death rollover gets you exactly one tax-free hop, from the first parent to the surviving parent. When the second parent dies, the whole remaining RRIF lands on their final return. That fact matters a lot, and I'll come back to it.

5. A few one-way doors into your RRSP

For completeness, a handful of other amounts can be transferred into your own RRSP without using room. They all involve your own money, not someone else's:

• Excess RRIF amounts back into your RRSP, or a commuted RRSP annuity - Form T2030
• Lump sums from your registered pension plan when you leave an employer - Form T2151
• Retiring allowances (severance) for years of service before 1996, within specific limits
• RRSP to your own FHSA - not into an RRSP, but worth knowing about since it goes the other direction. It's tax-free, uses FHSA room, and you don't get a deduction for it. More in the FHSA post.

That's the entire list. Notice what's not on it: anything from a living parent to a child. Which brings us to the workaround.

The Workaround - Withdraw, Gift, Contribute

Here's what this actually looks like when you do it properly.

Step 1 - The parent withdraws

If the parent still has an RRSP, they ask their institution for a withdrawal. If they've already converted to a RRIF, they ask for a payment above their annual minimum.

The institution withholds tax at source. For residents of Canada outside Quebec:

Quebec residents get 5%, 10% and 15% federally, plus separate Quebec withholding.

Two things that trip people up:

Withholding is not the final tax bill. It's a down payment. The withdrawal gets added to the parent's income for the year and taxed at their marginal rate. If their rate is higher than what was withheld, they owe the difference in April. If it's lower, they get some back. Parents doing this should ask for extra withholding, or set money aside, so the April bill isn't a surprise.

RRIF minimums have no withholding at all. Only the amount above the minimum gets withheld on the scale above. So a parent with a RRIF can't assume no withholding means no tax.

The parent gets a T4RSP slip (from an RRSP) or a T4RIF slip (from a RRIF) in February and reports it on their return. RRSP withdrawals go on line 12900. RRIF payments go on line 11500 if they're 65 or older, which also makes them eligible for the pension income amount and pension income splitting with their spouse.

Step 2 - The parent gifts the cash

This part is refreshingly simple. Canada has no gift tax. The parent doesn't report the gift, the child doesn't report receiving it, and there's no CRA form.

A few things worth knowing anyway:

• Attribution rules don't apply to gifts to adult children. Attribution - where investment income from a gift is taxed back to the giver - applies to gifts to a spouse or to related kids under 18. An adult child, or a child-in-law, is fine. The money and everything it earns is theirs.
• Make it a gift, not a loan. If it's set up as a low or no-interest loan and the CRA decides the main purpose was income splitting, attribution can come back into play even for adult kids. A clean gift avoids the question.
• Keep a paper trail anyway. An e-transfer or cheque with a clear memo, or a one-line signed note saying it's a gift with no expectation of repayment. Nobody files it, but it's useful if the bank asks about a large deposit, or if family law ever gets involved and someone needs to show where the money came from.
• Gifting securities instead of cash triggers capital gains. If the parent withdraws investments in kind from their RRSP and then gifts the shares, the gift is a deemed sale at fair market value. If the shares are given right after the withdrawal there's usually little or no gain, but it's not zero by default.

Step 3 - The child contributes to their own RRSP

Now the money is the child's, and it goes into the child's RRSP like any other contribution.

• It uses the child's contribution room. For 2026, new room is 18% of 2025 earned income up to $33,810, plus any unused room carried forward. The exact number is on the child's latest Notice of Assessment or in CRA My Account. No room, no deduction - and anything more than $2,000 over your limit costs 1% per month in penalty tax and requires filing a T1-OVP return.
• The child gets the deduction, claimed on Schedule 7 and line 20800 of their return, at their marginal rate.
• The deduction can be saved for later. You can contribute now and claim the deduction in a future year when your income is higher. If the child expects a big raise or a high-income year coming, holding the deduction can be worth more than using it right away.
• Contributions in the first 60 days of a year can be deducted against the previous year. So a parent who withdraws in December 2026 and gifts it, can still see the child contribute by early March 2027 and claim it on the child's 2026 return.

Can the parents pay straight into the child's RRSP and skip the gift step? Sort of. The CRA has said that a payment into someone's RRSP by a third party is treated as the annuitant's own contribution - as long as it's made at the annuitant's direction or with their agreement. The receipt goes to the child, not the parent, and the child claims the deduction. Not every institution will accept a third-party deposit, though, so check first. It's the same thing tax-wise, just fewer steps.

One option worth knowing if you're a couple: the gifted money can go into a spousal RRSP instead. The higher-earning spouse contributes it and takes the deduction at their higher rate. The lower-earning spouse owns the account and eventually pays tax on it at their lower rate. Mind the three-year attribution rule from the spousal RRSP post.

When It Works - and When It Backfires

Here's the part that decides whether to bother. The math is simpler than it looks.

The family's gain or loss today is roughly the amount moved, times the difference between the child's marginal rate and the parent's.

The parent pays tax at their rate on the way out. The child gets a deduction at their rate on the way back in. If the child's rate is higher, the refund is bigger than the tax.

Example 1 - It works

Linda is 70 with a modest pension, CPP, OAS and a RRIF. Her marginal tax rate is around 30%. Her daughter Priya earns a good salary, has plenty of RRSP room, and has a marginal rate around 43%. These are illustrative round numbers - look up your actual rates for your province and income.

• Linda takes $20,000 out of her RRIF above her minimum. $6,000 is withheld (30% on a withdrawal over $15,000), which roughly matches her actual tax on it.
• Linda gifts Priya the $14,000 that's left.
• Priya adds $6,000 of her own and contributes the full $20,000 to her RRSP.
• Priya's refund: $20,000 × 43% = $8,600.

Linda paid $6,000. Priya got back $8,600 and put in $6,000. The family is $2,600 ahead today - which is exactly $20,000 × the 13-point rate gap - and the full $20,000 is sitting in an RRSP again, now in the name of someone 30 years younger with decades of tax-deferred growth ahead.

If Priya contributes just the $14,000 instead of topping it up, her refund is $6,020 - almost exactly what Linda paid. Tax-neutral today, and $14,000 has moved to the next generation's RRSP.

Example 2 - It backfires

Now flip it. Robert is 68 with a large defined benefit pension and a big RRIF. His income is over the OAS clawback threshold, which is $95,323 for 2026 income. His marginal tax rate is around 43%, and every extra dollar also costs him 15 cents of OAS - an effective rate of roughly 58%. His son Mike is early in his career with a marginal rate around 20%.

• Robert takes $20,000 out. Tax plus OAS clawback: about $11,600.
• Mike contributes the full $20,000 and gets a refund of about $4,000.

The family is down roughly $7,600. Same withdrawal, same gift, same contribution. The only thing that changed was who was in the higher bracket.

In that situation, Mike is usually better off putting a gift into a TFSA instead, or just holding the RRSP contribution and saving the deduction for a future year when his income is higher.

The lower-income parent trap

There's a third case that looks like a winner and isn't. A parent with very low income looks like they'd pay almost no tax on a withdrawal. But if they receive the Guaranteed Income Supplement, every dollar of RRSP or RRIF income reduces their GIS - by at least 50 cents on the dollar, and more at the lowest incomes. Their real marginal rate can be higher than the child's even when their tax bracket is tiny. Run the GIS math before you assume a low-income parent is the cheap place to take money out.

Why This Can Make Sense Even When It's Tax-Neutral Today

The rate comparison above only looks at today. There's a bigger reason families do this, and it's what happens later if nobody does anything.

If parents are a couple, the first one to die can roll everything to the survivor tax-free. When the second parent dies, the entire remaining RRIF gets added to their final return in one year. A $400,000 RRIF on top of a final year's pension and CPP means a big chunk gets taxed at the very top bracket - often over 50%.

So the real comparison for parents with more RRSP money than they'll ever spend isn't "tax now vs. no tax." It's "tax now at a moderate rate vs. tax later at the top rate." Drawing down the RRIF steadily in lower brackets during their lifetime, and passing some of it to the kids as a gift along the way, can cut the family's total lifetime tax bill even in years when the gift itself looks neutral. The same logic is behind drawing down an RRSP before 71 - something my Drawdown Sequencer is built to help figure out - and the RRSP meltdown idea.

The goal is to fill up the lower brackets each year without tipping into the OAS clawback or killing GIS.

Things the Parents Can Do Instead (or As Well)

If the parents' real goal is "pay less tax on money we won't need," a few tools work for them directly, without involving the kids at all:

• Pension income splitting. From 65, up to 50% of RRIF income can be allocated to a spouse on Form T1032. If one parent has most of the RRIF money, this can drop them out of a higher bracket or below the OAS clawback threshold.
• Base RRIF minimums on the younger spouse's age. This lowers the required minimum. You choose it when you set up the RRIF, and you can't change it later.
• Spousal RRSP contributions after 71. If one parent is younger and the other still has RRSP room, the older one can keep contributing to a spousal RRSP until the end of the year the younger one turns 71.
• An advanced life deferred annuity (ALDA). Up to 25% of RRSP or RRIF money (to a lifetime limit of $180,000 in 2026) can be used to buy an annuity that doesn't start paying until as late as 85, which takes it out of the RRIF minimum calculation in the meantime.
• Name beneficiaries on the plans. This doesn't save income tax for adult kids, but in most provinces a named beneficiary keeps the RRSP or RRIF out of the estate and out of probate fees.

Where Else the Gift Can Go

Once the money is a gift, the child doesn't have to put it in an RRSP. Depending on their situation:

• TFSA - best if the child is in a low bracket now, or already maxes their RRSP. 2026 adds $7,000 of room, and someone who has been eligible since 2009 has $109,000 of total room if they've never contributed. Covered in the TFSA post.
• FHSA - if the child is a first-time home buyer. They get a deduction like an RRSP and a tax-free withdrawal for a home. See the FHSA post.
• RESP for the grandkids - grandparents can contribute to an RESP directly. The government adds a 20% grant on the first $2,500 a year per child. More in the RESP post.
• Paying down a mortgage - not a tax move, but a guaranteed after-tax return equal to the interest rate.

The CRA Checklist

If you're doing the withdraw-gift-contribute route, here's everything that needs to happen for the CRA to be happy.

The parent:

• Request the withdrawal (RRSP) or a payment above the minimum (RRIF) from their institution
• Decide whether to request extra withholding to cover their real marginal rate
• Receive a T4RSP or T4RIF slip and report the income (line 12900 for RRSP, line 11500 for RRIF at 65+)
• Pay any balance owing by April 30
• Check the impact on OAS (clawback threshold $95,323 for 2026 income), GIS, and the age amount
• Keep a record that the money was a gift

The child:

• Check RRSP deduction limit on the Notice of Assessment or CRA My Account before contributing
• Contribute to their own RRSP (or spousal RRSP) by December 31, or within the first 60 days of the next year to deduct against the prior year
• Report the contribution on Schedule 7 and claim the deduction on line 20800 - or carry it forward
• Stay within the room plus the $2,000 cushion, or file a T1-OVP and pay 1% a month on the excess

No form needed for: the gift itself.

Common Misconceptions I've Found Online

"We'll just fill out a T2033 and move it to our son's RRSP." No. The T2033 only works between plans with the same annuitant. A financial institution will reject it.

"It's staying in the family, so the CRA doesn't care." The CRA cares a lot. RRSP tax deferral is personal. Moving the money to anyone else - other than a spouse on separation or a qualifying survivor on death - means the deferral ends and the tax is due.

"My parents have to cash out their RRSP at 71." No. They have to convert it, usually to a RRIF. Only the annual minimum has to come out each year.

"If my parents name me as the beneficiary, I can roll it into my RRSP." Only if you were financially dependent on them, generally meaning you lived with them and had very low income - and for the RRSP rollover, only if that dependence was because of an impairment. For a working adult child, the full value is taxed on the parent's final return. Naming you as beneficiary mostly saves probate fees, not income tax.

"The beneficiary pays the tax on an inherited RRSP." Normally the deceased's estate pays it, on their final return. But if the estate can't pay, the CRA can go after the beneficiary who received the RRSP money. Executors should hold back enough to cover the tax before distributing anything.

"There's a gift tax in Canada." There isn't. There's no limit on how much parents can give adult kids, and no reporting.

"My parents can contribute to my RRSP using their room." No. Only a spouse can contribute using their own room (that's a spousal RRSP). Anything else uses your room, and only you can claim the deduction.

"The withholding tax covers it." Rarely exactly. Withholding is a flat rate based on the size of the withdrawal, not on the person's income. The real tax is settled on the tax return.

"It always saves tax because the kids get a refund." Only when the kids' marginal rate is higher than the parents'. If the parents are in a higher bracket - or in the OAS clawback zone, or on GIS - the family loses money.

The Short Version

• There is no tax-free way for living parents to transfer RRSP money into their kids' RRSPs
• Direct RRSP transfers only work between plans with the same annuitant (T2033), to a spouse on separation (T2220), or to a qualifying survivor on death (refund of premiums, T2019/T1090)
• An adult, independent child can't receive a tax-free RRSP rollover even on death - the full value is taxed on the parent's final return
• The workaround is withdraw, gift, contribute: the parent pays tax, gifts the cash (no gift tax, no attribution for adult kids), and the child contributes to their own RRSP using their own room
• The family gains roughly the amount × (child's marginal rate − parent's marginal rate). Positive gap, it works. Negative gap, it backfires
• Count the OAS clawback and GIS as part of the parent's real marginal rate
• Turning 71 means converting to a RRIF, not cashing out
• Even a tax-neutral gift can lower the family's lifetime tax bill by avoiding a big top-bracket RRIF on the second parent's final return
• If the child is in a low bracket, a TFSA, FHSA or RESP may be a better home for the gift

Let's go back to my in-laws. Their instinct was right - money they won't need is better off doing something useful in the next generation's hands. They just pictured it as a transfer, when it's really a withdrawal, a gift, and a contribution. Do those three steps when the parents are in the lower bracket, keep an eye on the OAS clawback, and it's one of the cleaner ways to move money down a generation in Canada. Do them the other way around and you've just handed the CRA a few thousand dollars for the privilege.