10 October 2003 Roundtable, 2003-0037135 F - CONTRATS DE RENTE VIAGERE

Also released under document number 2003-00371350.

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REG 301

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Translation disclaimer

This translation was prepared by Tax Interpretations Inc. The CRA did not issue this document in the language in which it now appears, and is not responsible for any errors in its translation that might impact a reader’s understanding of it or the position(s) taken therein. See also the general Disclaimer below.

Principal Issue: [TaxInterpretations translation]

Is a particular annuity contract a life annuity contract as defined in Regulation 301 of the Act?

Position: No

Reason:

The text of this provision does not allow this interpretation.

FINANCIAL PRODUCTS ROUNDTABLE
APFF - CONFERENCE 2003

Question 9

Life annuity contracts

There are situations where an annuity may be payable during an individual's lifetime when that individual is not the beneficiary of the annuity payments. The individual may be an employee or shareholder of a corporation and the corporation is the purchaser and owner of the annuity contract and is also the beneficiary of the annuity payments. Such an annuity contract is not a prescribed annuity contract and is therefore subject to the rules in section 12.2.

Can this annuity contract be considered a life annuity contract within the meaning of section 301 of the Income Tax Regulations?

CCRA Response

Such an annuity contract is not a "life annuity contract" within the meaning of ITR section 301 since it does not meet the conditions set out in that provision.

The definition of "life annuity contract" under ITR section 301 stipulates, inter alia, that annuity payments are made to an individual referred to for the purposes of that section as "the annuitant" and that such payments must continue throughout the lifetime of the annuitant. In the present situation, the annuity payments are made to a corporation and not to an individual as required by ITR section 301.

Michelle Desrosiers
October 10, 2003
2003-003713

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Text of Severed Letter

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 CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issue:

Un contrat de rente donné constitue-t-il un contrat de rente viagère tel que défini au règlement 301 de la Loi?

Position Adoptée: Non

Raison POUR POSITION ADOPTÉE :

Le texte de cette disposition ne permet pas cette interprétation.

TABLE RONDE SUR LES PRODUITS FINANCIERS
APFF - CONGRÈS 2003

Question 9

Contrats de rente viagère

Il existe des situations où une rente peut être payable durant la vie d'un individu alors que cet individu n'est pas le bénéficiaire des versements de rente. L'individu peut être un employé ou un actionnaire d'une société et la société est l'acquéreur et le titulaire du contrat de rente et est également le bénéficiaire des versements de rente. Un tel contrat de rente ne constitue pas un contrat de rente visé par règlement et est donc assujetti aux règles prévues à l'article 12.2 L.I.R.

Peut-on considérer que ce contrat de rente constitue un contrat de rente viagère au sens de l'article 301 du Règlement de l'impôt sur le revenu?

Réponse de L'ADRC

Un tel type de contrat de rente ne constitue pas un " contrat de rente viagère " au sens de l'article 301 R.I.R.puisqu'il ne rencontre pas les conditions prescrites par cette disposition.

La définition de " contrat de rente viagère " en vertu de l'article 301 R.I.R stipule entre autres que les versements de rente sont effectués à un particulier appelé aux fins de cet article " le rentier" " et que lesdits versements doivent continuer à être versés au rentier sa vie durant. Or, dans la présente situation, les versements de rente sont faits à une société et non à un particulier tel que le requiert l'article 301 R.I.R.

Michelle Desrosiers
Le 10 octobre 2003
2003-003713

Summaries

Summary Under

Tax Topics - Income Tax Regulations - Regulation 301 - Subsection 301(1)

annuity did not qualify as a "life annuity" where payments made to a corporation

Where an annuity may be payable during the lifetime of an individual, who may be an employee or shareholder of a corporation, and the corporation is the purchaser and owner of the annuity contract and is also the beneficiary of the annuity payments, will the annuity contract be considered a life annuity contract within the meaning of Reg. 301? CCRA responded:

Such an annuity contract is not a "life annuity contract" within the meaning of ITR section 301 since it does not meet the conditions set out in that provision.

The definition of "life annuity contract" under ITR section 301 stipulates, inter alia, that annuity payments are made to an individual referred to for the purposes of that section as "the annuitant" and that such payments must continue throughout the lifetime of the annuitant. In the present situation, the annuity payments are made to a corporation and not to an individual as required by ITR section 301.

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10 October 2003 Roundtable, 2003-0037135 F - CONTRATS DE RENTE VIAGERE

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