Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Whether or not there is a disposition of a life insurance policy where a life insurance policy is owned by a trust and there is a change of trustees.
Position: No.
Reasons: Where the terms of the trust provide for the change of trustees a change of trustees in and by itself will not result in a disposition for purposes of section 148 of the Act.
XXXXXXXXXX 2000-000386
Attention: XXXXXXXXXX
April 7, 2000
Dear Sirs:
Re: Change of Trustee
This is in reply to your letter of January 21, 2000 wherein you requested our views as to whether or not there is a disposition of a life insurance policy pursuant to section 148 of the Income Tax Act "Act" which is owned by a trust when a change of trustees occurs.
Where the terms of the trust provide or allow for the change of trustees it is our view that a change of trustees, in and by itself, would not result in a disposition for purposes of section 148 of the Act. This is consistent with paragraph (e) of the definition of "disposition" in section 54 of the Act which provides that a change in legal ownership without any change in beneficial ownership (other than specific exceptions which do not appear to be applicable to your query) would not constitute a disposition.
The foregoing comments are intended as a general discussion only and we note that the income tax consequences will depend on the facts of each particular situation which can only be determined on a case by case basis. Therefore while we hope that our comments are of assistance to you, this opinion is not a ruling and accordingly, it is not binding on Canada Customs Revenue Agency.
Yours truly,
F. Lee Workman
Section Manager
Financial Institutions Section
Financial Industries Division
Income Tax Rulings Directorate
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