CRA finds that post-retirement insurance premiums which secure coverage for pre-retirement negligent professional advice can be deductible

After referring to Poulin, CRA accepted that post-retirement premiums paid by a former professional to cover off any negligence claims respecting pre-retirement advice given “during the ordinary course of the professional’s business operation” could qualify for deduction, even though the retired professional no longer had a source of professional income. Otherwise than perhaps quibbling about CRA’s reference to the insured advice having been given in the “ordinary course” rather than the “course” of the professional practice (see McNeill), this looks right.

Neal Armstrong. Summary of 3 December 2015 T.I. 2015-0618981E5 under s. 18(1)(a) - start-up and liquidation costs.