Section 12.2

Subsection 12.2(1) - Amount to be included

Administrative Policy

IT-87R2 "Policyholders' Income from Life Insurance Policies".


Strain, "Life Insurance: An Innovative Financial Instrument", 1993 Conference Report, pp. 35:9-10.

Paragraph 12.2(1)(a)

Administrative Policy

14 May 2019 CLHIA Roundtable Q. 6, 2019-0799101C6 - CLHIA 2019 Conference-Q6 Foreign Exempt Policies

taxpayer cannot rely on failure of foreign insurer to test exemption

Annual income accrual is required on life insurance policies that are not exempt policies. It is unlikely that testing for compliance with Reg. 306(1) will be routinely performed by the insurer for policies issued outside of Canada where the policyholder is resident in, or immigrates to, Canada. Where the policy is not issued in Canadian currency, there could be failure under the exempt test simply as a result of FX fluctuations. What is such a Canadian taxpayer to do?

CRA responded:

Given that the information to determine the exempt status of a particular life insurance policy is only available in the accounts of the insurer, the onus is on the policyholder to establish that the policy qualifies as an exempt policy.

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 306 - Subsection 306(1) no accommodation for the technical impossibility of demonstrating that a life insurance policy issued abroad is exempt 200