CRA suggests that s. 15(1) might apply where a corporation pays the premiums on a segregated fund insurance policy under which its shareholder or spouse is the beneficiary
A CCPC owns a segregated fund insurance policy under which its sole shareholder is the life insured and his spouse has been named as a revocable beneficiary under the policy. As the policyholder, the corporation receives the annual income and capital gains under the policy.
CRA noted its longstanding position that there is a s. 15(1) benefit when a corporation pays the life insurance premiums on a policy under which its shareholder or a related person is the beneficiary, and that the amount of the annual benefit is “usually” equal to the annual amount of the insurance premiums paid by the corporation.
It then indicated that since a segregated fund policy is a type of life insurance policy, it could not confirm that no s. 15(1) benefit could arise in this situation, but that the question of whether there was such a benefit conferred “is generally one of fact to be determined on a case-by-case basis.”
Neal Armstrong. Summary of 3 May 2022 CALU Roundtable Q.6, 2022-0928841C6 under s. 15(1).