CRA considers that a TFSA cannot hold a non-commutable life annuity
Life annuities providing benefits that are purely contingent on the life’s continuing survival generally are not commutable. CRA considers that in the absence of commutability, the life annuity contract will not satisfy s. 146.2(2)(e) and, therefore, cannot be registered as a TFSA. In addition, it is not a qualified investment for a trusteed TFSA.
Subsection 146.2(2) provides that a “qualifying [TFSA] arrangement” must:
(e) … provide that, at the direction of the holder, the issuer shall transfer all or any part of the property held in connection with the arrangement (or an amount equal to its value) to another TFSA of the holder;
CRA apparently is reading into this wording a requirement that the arrangement represent transferable property.
Neal Armstrong. Summary of 14 May 2019 CLHIA Roundtable Q. 7, 2019-0799121C6 under s. 146.2(2)(e).