7 November 1997 External T.I. 9721545 - LIFE INSURANCE POLICY PREMIUMS PAID BY A TRUST

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principales Questions:

application subsection 105(1) of the Act where a corporation is the beneficiary of a life insurance policy but a trust is the policyholder

Position Adoptée:

The determination as to whether or not a benefit is conferred to a taxpayer from or under the trust is a question of fact that can only be determined following a review of all of the relevant facts pertaining to the particular situation.

Raisons POUR POSITION ADOPTÉE:

ccm 9415675, 950051 and 931019

XXXXXXXXXX 5-972154

Attention: XXXXXXXXXX

November 7, 1997

Dear Sirs/Madams:

Re: Subsection 105(1) of the Income Tax Act

We are replying to your facsimile of August 11, 1997 wherein you requested a technical interpretation on subsection 105(1) of the Income Tax Act (the "Act").

As explained in Information Circular 70-6R3, it is not the Department's practice to comment on proposed transactions other than in the form of advance income tax rulings. Taxpayers seriously contemplating proposed transactions are best advised to seek a formal ruling, submitting a complete statement of facts and issues as well as copies of all relevant documents. Should your situation involve completed transactions, you should submit all relevant facts and documentation to the appropriate Tax Services Office for their views. We are therefore not in a position to give you a definite response as to the application of the provisions of the Act. However, we can offer you the following general comments.

Generally, subsection 105(1) of the Act provides that the value of all benefits to a taxpayer during a taxation year from or under a trust shall be included in computing the taxpayer's income for the year except to the extent that the value is otherwise required to be included in computing the taxpayer's income for a taxation year or has been deducted under paragraph 53(2)(h) of the Act. With respect to your particular question, the determination as to whether or not a benefit is conferred on a taxpayer from or under the trust is a question of fact that can only be determined following a review of all of the relevant facts pertaining to the particular situation. As such, we are unable to opine in respect of the issue raised in your facsimile.

Yours truly,

Marc Vanasse, CA
for Director
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch