Income Tax Severed Letters - 2021-07-14

Conference

19 May 2021 CLHIA Roundtable Q. 2, 2021-0884271C6 - 2021 CLHIA Roundtable - Q2 - Tax Promoter Schemes

Principal Issues: Can the CRA provide details on its review of tax promoter schemes and, in particular, provide details on the types of strategies under review that use insurance products to create certain tax benefits?

Position: Please see response that refers to the comments provided at the 2020 CALU Roundtable.

19 May 2021 CLHIA Roundtable Q. 3, 2021-0884281C6 - 2021 CLHIA Roundtable - Q3 - Folios

Unedited CRA Tags
148

Principal Issues: This question and answer deals with the current status of the Income Tax Folio Project and in particular, the Income Tax Folio that will replace IT-87R2, Policyholder's Income from Life Insurance Policies

Position: Update provided

Reasons: NA

19 May 2021 CLHIA Roundtable Q. 4, 2021-0884291C6 - 2021 CLHIA Roundtable - Q4 - Life insurance shares

Unedited CRA Tags
70(5.3)
Summary Under
Tax Topics - Income Tax Act - Section 70 - Subsection 70(5.3)
CSV of policy to be allocated to the respective share classes based on their entitlements to the death benefit

Principal Issues: We were asked to confirm the CRA's position described in document 2005-0138111C6 regarding the allocation of the cash surrender value (CSV) of a life insurance policy for the purpose of determining the fair market value of property (shares) deemed to have been disposed as a consequence of death in accordance with subsection 70(5.3).

Position: Our position with respect to the allocation of the CSV for purposes of subsection 70(5.3) remains unchanged.

Reasons: Consultation with Business Equity Valuations Section in CPB.

19 May 2021 CLHIA Roundtable Q. 5, 2021-0884301C6 - 2021 CLHIA Roundtable - Q5 - Life insurance shares

Unedited CRA Tags
70(5.3)
Summary Under
Tax Topics - Income Tax Act - Section 70 - Subsection 70(5.3)
the holding on death of an insurance tracking share would not prevent the underlying policy’s CSV being attributed for ss. 70(5) and (5.3) purposes to the common shares

Principal Issues: We were asked to confirm the CRA's position described in document 2005-0138361C6 regarding the allocation of the cash surrender value (CSV) of a life insurance policy for the purpose of determining the fair market value of property (shares) deemed to have been disposed as a consequence of death in accordance with subsection 70(5.3).

Position: Our position with respect to the allocation of the CSV for purposes of subsection 70(5.3) remains unchanged.

Reasons: Consultation with Business Equity Valuations Section in CPB.

19 May 2021 CLHIA Roundtable Q. 6, 2021-0891011C6 - 2021 CLHIA Roundtable - Q6 - ITRD - Remissions

Principal Issues: How will the Income Tax Rulings Directorate determine remissions, as described in section 7 of the Service Fees Act, for rulings and pre-ruling consultations.

Position: Remissions will apply to rulings and pre-ruling consultations received by the Directorate after April 1, 2021. Information on calculating remissions is described in Appendix H of IC 70-6R11 Advance Income Tax Rulings and Technical Interpretations