Kevin Wark, Michael O'Connor, "The Next Phase of Life Insurance Policyholder Taxation is Nigh", Canadian Tax Journal (2016) 64:4, 705 - 50

Overview/purpose of accumulating fund (p. 709)

The accumulating fund is intended to represent the savings element in the policy and has...

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Shift to one-year pre-test (p. 719)

[T]he rule now requires only a one-year pre-test. This requires the insurance company to project the...

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Example of additional exempt test policy where >8% annual increase in death benefit (p. 720)

Example 1

Assume that a life insurance policy is...

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Redating of exempt test policy where >250% increase in accumulating fund over 3 years (p. 721)

In addition to the so-called 8 percent test,...

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Effect of changes to the calculation of the accumulating fund for future policies (pp. 723-4)

There are significant changes to the calculation of...

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Impact of death benefit on adjusted cost basis of a multi-life policy (pp. 730-1)

New paragraph 148(2)(e)…applies to a situation where an...

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Deeming of partial surrender of policyholder’s interest so as to reduce policy loan to be loan repayment followed by partial surrender (pp....

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Effect of net cost of pure insurance on policy ACB (pp. 733-4)

The NCPI of a policy reduces the ACB of policies last acquired after December 1,...

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