Life Income Fund (LIF)
Income Tax Act s. 251(1), s. 251(2)
For tax purposes, a life income fund is treated as a
registered retirement income fund (RRIF). There are no legislative
provisions in the Income Tax Act for LIFs.
A LIF is a locked-in account which has been created
with funds that originated with a registered pension plan (RPP).
LIFs are governed by federal or provincial pension
legislation. Some provinces have LIFs, some have LRIFs, and some
have both. One difference, where both exist, is the calculation
of maximum annual withdrawals.
Characteristics of a LIF: