Do funds become taxable if they are unlocked?
Yes, but only if they are withdrawn. Withdrawals from all tax-deferred vehicles are taxable under the Income Tax Act or other legislation. People should seek professional advice about their tax implications before making such withdrawals. Direct transfers of funds from one tax-deferred vehicle to another are not taxable under the Income Tax Act. An example of this would be unlocking funds from an RLIF and placing the proceeds into an RRSP.
