# Unlocking 50% of LIRA: Taxation Implications?



## myworldnow (Apr 1, 2015)

In January I converted my LIRA to a LIF in Ontario. I took advantage of the 50% unlocking rule. My understanding was that there were no tax implications as you were simply transferring from one locked-in retirement savings vehicle to an unlocked savings vehicle (RRSP). As it was a direct transfer I understood there would be no tax implications. I have now received an income tax receipt re: RRSP contribution for that amount. I'm assuming one will be coming for the withdrawal/transfer.

My questions are:

1. Is this considered income in Ontario? (which doesn't make sense to me as it means you would pay tax on it twice. Once when you transfer it and again when you withdraw it)
2. Where is this reported on the income tax form?
3. Will I be receiving a corresponding income tax receipt with regards to the withdrawal?
4. Is my RRSP contribution room a factor? I certainly don't have enough room for this amount.

Any clarifications you can give would be greatly appreciated.

Thank you!


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