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:
Follow-up requesting further clarification of our opinion (962272) dated October 16, 1996 concerning the tax treatment of life insurance proceeds received by a beneficiary as a result of the death of the life insured under an exempt life insurance policy.
Position:
Confirmed our general views as stated in our earlier opinion.
Reasons:
If a more specific response is required, writer should request an advance income tax ruling or a written opinion from the appropriate tax services office depending on whether his concerns relate to a specific proposed transaction or a completed transaction.
XXXXXXXXXX 5-970157
Attention: XXXXXXXXXX
January 27, 1997
Dear Sirs:
Re: Life Insurance Proceeds Subsection 148(1) of the Income Tax Act
This is in reply to your letter of January 17, 1997 and further to our letter to you dated October 16, 1996.
As indicated in Revenue Canada Information Circular 70-6R3 dated December 30, 1996, the Department provides technical interpretations of specific provisions of the income tax law. Such interpretations, by necessity, are general in nature in that they do not deal with specific fact situations and cannot possibly contemplate all fact situations. Accordingly we are not able to confirm your request that "under no circumstances" are gains from the disposition of an interest in an exempt policy included in the income of the beneficiary or assignee of the policy that receives the proceeds.
Our general views as to the taxation of life insurance proceeds were set forth in our letter of October 16. If you are concerned that in the particular case you have that the beneficiary or assignee will be subject to taxation as a consequence of the disposition of the policy we would be prepared to address your concerns by way of an advance income tax ruling. If your situation deals with a completed transaction a request for a technical interpretation, which would contain all of the relevant information, should be directed to the appropriate Tax Services Office.
We trust that this clarifies our position in this matter.
Yours truly,
Chief
Financial Institutions Section
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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