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) |
900348 |
| |
M.M. Trotier |
| |
957-8957 |
| |
EACC9432 |
| July 16, 1990 |
19(1)
This is in reply to your letter of April 4, 1990 concerning the taxation of the advance payment of death benefits to policyholders suffering from terminal illnesses. In your view such an advance payment of a portion of the death benefit will not result in the disposition of the related policyholder's interest in the life insurance policy on the basis of the exclusion in subparagraph 148(9)(c)(ix) of the Income Tax Act (the "Act") for payments under a life insurance policy in consequence of the death of the insured.
Subparagraph 148(9)(c)(ix) of the Act does not refer to payments made in contemplation of death but rather those payments made as a consequence of death of any person whose life was insured under the policy. In our view only payments made after the death of the insured are addressed by subparagraph 148(9)(c)(ix) of the Act.
Accordingly it is our opinion that such advance payments would not be payments made in consequence of the death of the insured for purposes of subparagraph 148(9)(c)(ix) of the Act.
We hope our comments are of assistance to you.
F. Lee Workman Chief Financial Industries DivisionRulings Directorate
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