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.
DM'S OFFICE (2) 96-04510M
ASSOCIATE DEPUTY MINISTER (1)
ADM'S OFFICE (3)
PENDING
RETURN TO INCOME TAX RULINGS
AND INTERPRETATIONS DIRECTORATE
15TH FLOOR, ALBION TOWER
July 24, 1996
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable Jane Stewart, Minister of National Revenue has asked me to respond to a letter of June 3, 1996, from XXXXXXXXXX regarding the tax treatment of life insurance premiums paid on your behalf by your former employer, XXXXXXXXXX.
You have expressed concern over the increases to your taxable employment benefits in the past two years, related to the group term life insurance premiums. It is my understanding, XXXXXXXXXX pays most of the premium required under the terms of the life insurance policy.
Under the provisions of the Income Tax Act, as it applied to insurance coverage for periods prior to July 1994, premiums paid by the employer for coverage up to $25,000 were not required to be included in the income of the employee or retired employee. The employer-paid portion of the premium related to coverage in excess of $25,000 was required to be included in the individual's income as a taxable employment benefit. The $25,000 exemption was discontinued effective July 1994. As a result, essentially all of the employer-paid portion of the premium is now required to be reported by the insured individual as a taxable employment benefit.
Unfortunately, I am not in a position to comment on the specific amount of the premium. You may wish to enquire with either the insurer or your former employer as to what you should expect the future premium costs to be for the life insurance coverage you are receiving.
I trust that my comments will be of assistance to you.
Yours sincerely,
Pierre Gravelle, Q.C.
J.A. Szeszycki
957-2131
June 27, 1996
962227
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© Her Majesty the Queen in Right of Canada, 1996
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© Sa Majesté la Reine du Chef du Canada, 1996
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