Principal Issues: A) Mr. X is a policyholder of an interest in a life insurance policy which has no cash surrender value. Mr. X wants to transfer the policy to its wholly-owned corporation for no consideration. Whether the deemed proceeds of the disposition of the interest in the policy to Mr. X would be equal to the ACB pursuant to subsection 148(7) as proposed in the Legislative Proposals Relating to Income Tax, Sales Tax and Excise Duties released on July 29, 2016 and would take precedence over subsection 69(1)?

Principal Issues: Does the designated benefit eligible to be transferred to the surviving spouse's RRIF or RRSP under paragraph 60(l) have to be reduced by the RRIF minimum amount when the transfer occurs in a year that is different than the year of death?

Position: Yes

Reasons: This is the result of the element C in the formula of the eligible amount in subsection 146.3(6.11).

7 OCTOBER 2016 APFF FEDERAL ROUNDTABLE ON FINANCIAL STRAEGIES AND INSTRUMENTS - 2016 CONFERENCE

Question 2

Principal Issues: Whether subsection 15(1) could apply to the transfer (without consideration) by a corporation of its critical illness insurance policy to its sole shareholder?

Position: Yes in the situation described.

Reasons: No consideration paid by the shareholder.

7 October 2016 APFF Financial Strategies and Financial Instruments Roundtable - 2016 Conference

Question 1

Principal Issues: 1) Will section 7 and subsection 7(1.1) apply to the issuance of shares when those shares are issued as a payment of a bonus granted in accordance with an employment contract that provides for such a bonus when certain conditions are met?
2) If the employment contract provides the employee with the choice to receive the bonus in cash or in shares and the employee chooses to receive the bonus in shares, will our answer be the same?