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.
| 19(1) |
File No. 5-9193 |
| |
Maureen Shea-DesRosierss |
| |
(613) 957-8953 |
February 6, 1990
Dear Sirs:
Re: 24(1)
This is in reply to your letter of November 23, 1989 in which you requested our views as to whether the life insurance policy 24(1) attached to your letter constitutes a qualified investment for a self-administered Registered Retirement Savings Plan.
Generally, a life insurance policy is not a qualified investment for a Registered Retirement Savings Plan ("RRSP"). However, through the provisions of subsections 146(11) and 198(6) of the Income Tax Act (the "Act") the acquisition of a life insurance policy shall be deemed not to be the acquisition of a non-qualified investment if the provisions of paragraphs 198(6)(c), (d) and (e) of the Act are satisfied.
As presently drafted, it is our opinion that the life insurance policy 24(1) (the "policy") would not be a qualified investment for an RRSP pursuant to paragraph 146(1)(g) of the Act since the requirements of paragraphs 198(6)(c), (d) and (e) of the Act are not met.
24(1)
Secondly, the provisions of paragraph 198(6)(c) of the Act are not outlined in sufficient detail. The policy should clearly state that the trust administering the RRSP of the annuitant is, or following payment will become, the only person entitled to any rights or benefits under the policy (other than the rights or benefits of the insurer).
Thirdly, the provisions of paragraph 198(6)(e) of the Act are not satisfied. Said paragraph requires that the total of the premiums payable in any year under the policy is not greater than the aggregate of the amount that, if the annual premiums had been payable in monthly instalments, would have been payable as such instalments in the 12 months commencing with the date the policy was issued.
24(1)
Since your policy does not meet the requirements of paragraphs 198(6)(c), (d) and (e) of the Act, we suggest you write to the Department of Finance, Tax Policy, Legislation Branch, for any amendment that would be necessary for such a policy to be a qualified investment for RRSP purposes.
We trust the above comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate
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