Ontario LIRAs now breakable for non-residents

nelsona · Post by **nelsona** » Tue Feb 24, 2009 11:45 pm

LIRAs regulated by Ontario have not easily been broken, even by non-residents.

Since early 2008, however, those who have been non-residents of Canada for more than 2 years can collapse their LIRA, or move them to a regular RRSP.

http://www.fsco.gov.on.ca/english/forms ... _01-08.pdf

rgiustini · Post by **rgiustini** » Wed Mar 25, 2009 12:58 pm

Hi NelsonA,

Thank you for that information. I have two questions:

1. Can a similar transfer from a LIRA to an RRSP be done with plans that fall under Quebec jurisdiction?
2. What would be the advantage of transferring from a LIRA to an RRSP?

Best regards. I think your forum is great, and I appreciate the effort you put into it.

nelsona · Post by **nelsona** » Wed Mar 25, 2009 1:31 pm

1. QC LIRAs have not been restricted in the past. However, generally one can only collapse a LIRA as a non-resident, not move it to another RRSP.

2. The advantage is obvious. You can then treat this RRSP as you would any other, being able to withdraw from it rather than collapse it, at a time and pace that suits you. (MY spouse, for instance, was able to collapse a $60K RRSP almost entirely tax-free by taking it out over several years while not working, using section 217. Had it been a lira, she would have had to take it in one shot, and would not have been able to avoid Cdn tax).

I should point out that you will need to CAREFULLY read the new regs, as the Ontario regs now list the 3 or 4 reasons to permit LIRA to be unlocked, and not ALL reasons allow transfer to RRSP, some (including being non-resident) may only permit full collapse.