CRA notes that implementing a life insurance interest sharing strategy may entail the entire policy’s disposition and uncertainties as to what interest is disposed of

An individual owning a policy on that individual’s life with coverage of $1 million, a cash surrender value (“CSV”) of $250,000 and an adjusted cost basis ("ACB") of $150,000, donates ½ of the individual’s interest in the policy to a registered charity or, alternatively, only donates ½ of the entitlement to the CSV. Rather than responding to a query as to how the gain under s. 148(7) should be computed, CRA referred to the threshold issue of whether such a transaction would result “in a disposition of the entire interest in the policy rather than just a portion of it.” Furthermore, even if this was “a life insurance interest sharing strategy” that did not entail a disposition of the entire policy:

it would be necessary to determine whether it is possible to determine what fraction of the whole represents the portion assigned to the donee and also whether, as a result of the assignment, the donor and donee would be joint policyholders or, rather, each would own a separate policy.

Neal Armstrong. Summary of 2021 APFF Financial Strategies and Instruments Roundtable, Q.2 under s. 148(9) - disposition.