CRA does not accept that s. 160 cannot apply to a death payment made out of a segregated fund

In Higgins, the payment of death benefits under a London Life segregated fund to named beneficiaries (the daughters of the tax debtor) was found not to constitute a transfer by the estate to which s. 160 could apply given that London Life, in paying such benefits, was fulfilling a direct obligation to them under what Rowe DJ characterized as being predominantly an insurance policy.

CRA declined to indicate that it was following Higgins and suggested that Higgins was inconsistent with Orpin v. Littlechild, 2011 ONSC 7695 - and instead stated that “with so many unique financial products, and various legislation governing them, the application of section 160 of the Act is decided on a case-by-case basis.”

Neal Armstrong. Summary of 3 May 2022 CALU Roundtable Q. 11, 2022-0928911C6 under s. 160(1).