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.
| |
October 25, 1990 |
| Current Amendments and |
Rulings Directorate |
| Regulations Division |
R.D. Weil |
| |
(613) 957-2141 |
| Attention: Mr. R. D'Aurelio |
| Director |
900841 |
SUBJECT: Pre-funding of Group Term Insurance for Retiring Employees
Attached is a copy of a recent letter from the 24(1) concerning the tax implications of pre-funding a group term life insurance policy for a retiring employee.
Apparently, proposed amendments to the standards of financial accounting in the United States may soon require such pre-funding, an indication that this practice may become wide-spread in Canada.
As indicated in our reply (copy also attached), subparagraph 18(9)(a)(iii) of the Act would restrict the amount deductible in respect of the payment of a single premium to purchase an insurance policy in the above circumstances to the amount paid in respect of coverage for the year in question. In each future year, paragraph 18(9)(b) of the Act would permit a deduction in that year of the part of the single premium that relates to coverage in that year.
We are bringing this matter to your attention for whatever action you consider necessary.
R.J.L. ReadDirector GeneralRulings DirectorateLegislative and Intergovernmental Affairs Branch
Attachments (2)
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1990
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1990
Email this Content