Subsection 148(1)
See Also
Andersen v. The Queen, 2020 TCC 51 (Informal Procedure)
The taxpayers terminated life insurance policies for personal purposes, and were ultimately reassessed to include in their income the gross...
White v. The Queen, 2008 TCC 414 (Informal Procedure)
The term life insurance policy which the taxpayer acquired in September 1983 provided a “return of premium” (ROP) benefit for which the...
Administrative Policy
7 October 2011 Roundtable, 2011-0408351C6 F - Honoraire d'évaluation d'une police d'assurance
An actuary is retained to determine the fair market value of a life insurance policy by an individual to a wholly-owned corporation, and the...
19 December 2001 External T.I. 2001-0115095 F - DISPOSITION D'UNE ASSURANCE-VIE
S. 148(1) applied to the amount received on maturity of a life insurance policy acquired before 1982 payment resulting from the death of the...
Subsection 148(2) - Deemed proceeds of disposition
Administrative Policy
19 March 1992 T.I. (Tax Window, No. 18, p. 21, ¶1822)
Where a policy holder provides standing instructions to make partial withdrawals from his savings account this, by itself, will not constitute the...
Paragraph 148(2)(b)
Administrative Policy
6 January 2005 Internal T.I. 2004-0100241I7 F - Imposition des rentes au décès
Regarding the taxation of prescribed and non-prescribed annuity contracts on the death of the holder and annuitant (the "Annuitant"), the...
Paragraph 148(2)(e)
Articles
Kevin Wark, Michael O'Connor, "The Next Phase of Life Insurance Policyholder Taxation is Nigh", Canadian Tax Journal (2016) 64:4, 705 - 50
Impact of death benefit on adjusted cost basis of a multi-life policy (pp. 730-1)
New paragraph 148(2)(e)…applies to a situation where an...
Subsection 148(4.01)
Articles
Kevin Wark, Michael O'Connor, "The Next Phase of Life Insurance Policyholder Taxation is Nigh", Canadian Tax Journal (2016) 64:4, 705 - 50
Deeming of partial surrender of policyholder’s interest so as to reduce policy loan to be loan repayment followed by partial surrender (pp....
Subsection 148(7) - Disposition at non-arm’s length and similar cases
Administrative Policy
10 October 2024 APFF Financial Strategies and Instruments Roundtable Q. 10, 2024-1027331C6 F - Distribution of life insurance - 107(2) and 148(7)
In 2023-0990531C6, CRA indicated that, where a life insurance policy is distributed by a personal trust in satisfaction of an income interest in...
21 December 2023 External T.I. 2020-0866651E5 F - Transfer of life insurance
A private corporation (Aco) distributes a life insurance policy of which it is the holder and beneficiary and with an adjusted cost basis (ACB),...
2 November 2023 APFF Financial Strategies and Instruments Roundtable Q. 5, 2023-0978561C6 F - Partnership – distribution of a life insurance police
Regarding the situation where a partnership held, was the beneficiary of, and paid the premiums for 10 years on, three policies on the lives of...
3 November 2023 APFF Financial Strategies and Instruments Roundtable Q. 4, 2023-0990531C6 F - Life insurance policy transfer
A private company (Aco) was the beneficiary and holder of a policy, on the life of Mr. X, with an adjusted cost basis (ACB), cash surrender value...
29 September 2022 External T.I. 2021-0882411E5 - Partnership wind-up - life insurance
Alternatively, a limited partnership between two individuals as limited partners and a corporation (Opco) as the general partner and which is the...
5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 1, 2018-0761521C6 F - Life insurance policy as share redempt. proceeds
2017-0690331C6 found that a dividend-in-kind by a subsidiary to its parent of a life insurance policy would result in proceeds of disposition to...
14 May 2015 CLHIA Roundtable Q. 5, 2015-0573821C6 - Safe income
Prior to a sale by Holdco of all the shares of Opco to an arm's length purchaser, Opco will transfer its interest in the Policy on the life of Mr....
14 May 2015 CLHIA Roundtable, 2015-0573841C6 - 2015 CLHIA Roundtable Winding-up and ACB
At the 2005 CALU Roundtable (2005-0116631C6), the CRA indicated that s. 69(5) would likely take precedence over s. 148(7) on the wind-up of a...
27 May 2009 External T.I. 2008-0303971E5 F - Transfer of a life insurance policy
An individual is the owner of, and the insured under, a whole life insurance policy having an adjusted cost basis of $45,000, a cash surrender...
5 June 2007 Internal T.I. 2007-0237291I7 F - Disposition d'une police d'assurance-vie
CRA indicated that it considers a partnership to be a person for income-computation purposes, so that s. 148(7) would apply to a gift of policies...
6 October 2006 Roundtable, 2006-0197211C6 F - Transfert de police d'ass-vie entre sociétés
S. 148(7) applies where a corporation whose capital stock is wholly owned by an individual transfers an interest in a life insurance policy of the...
10 October 2003 Roundtable, 2003-0035665 F - TRANSFER D'UNE POLICE D'ASSURANCE-VIE
A corporation transfers a policy on the life of an arm’s length shareholder for consideration equal to the policy’s fair market value, which...
10 October 2003 Roundtable, 2003-0035655 F - CBR D'UNE POLICE D'ASSURANCE TRANSFEREE
A corporation held a life insurance policy on an individual who was a senior executive and shareholder. The death benefit of $1,000,000 was...
6 October 2003 External T.I. 2003-0040145 F - TRANSFERT D'UNE POLICE D'ASSURANCE-VIE
A shareholder transferred a universal life insurance policy, that was an exempt policy, on the individual’s life to a wholly-owned corporation...
10 October 2003 Roundtable, 2003-0036865 F - TRANSFER DE POLICE D'ASSURANCE
S. 148(7) did not apply to the transfer of a critical illness policy by a corporation to its shareholder.
21 November 1991 T.I. (Tax Window, No. 13, p. 20, ¶1607)
Where a taxpayer, who owns a 1/4 interest in a life insurance policy transfers his interest to the other three owners with whom he does not deal...
Articles
David Louis, Michael Goldberg, "Life Insurance: Exploring the Corporate Edge - Part II", Tax Topics No. 1682, June 3, 2004, p. 1.
Paragraph 148(7)(a)
Administrative Policy
6 October 2017 APFF Financial Strategies and Instruments Roundtable Q. 9, 2017-0705231C6 F - Gift of a Life Insurance Policy and Subrogated Own
The will of Mr. Donor provided for a gift of his life insurance policy on the life of his daughter to a private foundation. On his death, the...
18 May 2017 Roundtable, 2017-0690331C6 - CLHIA Q2 Dividend in kind transfer of policy
Mr. X holds the preferred shares of Opco with a redemption value of $1 million, and adjusted cost base and paid-up capital of $1, and a family...
7 June 2017 External T.I. 2016-0671731E5 F - Transfer of life insurance policy by dividend in kind
Holdco, which was the holder and beneficiary of a life insurance policy on the life of its sole shareholder, transferred the policy to him as a...
7 October 2016 APFF Financial Strategies and Instruments Roundtable Q. 3, 2016-0651761C6 F - Transfer of a Life Insurance Policy
(a) Mr. X, who has for a number of years been the policy holder of a term life insurance policy (for 100 years) without a cash surrender value...
Paragraph 148(7)(b)
Administrative Policy
14 May 2019 CLHIA Roundtable Q. 2, 2019-0799051C6 - 2019 CLHIA Roundtable - 148(7) questions
As a result of employee B no longer being considered to be a key employee, her employer (Corporation A) transfers its “key person” permanent...
Subsection 148(8) - Idem [Disposition at non-arm’s length and similar cases]
Administrative Policy
7 May 2024 CALU Roundtable Q. 3, 2024-1007101C6 - Transfer of policy to child
Parent A acquires and is the sole policyholder of a joint-last-to-die life insurance policy on the life of Child B and Child B’s spouse (B’s...
8 May 2018 CALU Roundtable Q. 3, 2018-0745831C6 - Subsection 148(8) transfer
After referencing inter alia 2004-0065441C6, which indicated that an s. 148(8) rollover would not apply to a transfer of a life insurance policy...
5 June 2013 External T.I. 2013-0481381E5 - Transfer of Life Insurance Policy
In confirming that the transfer of a life insurance policy jointly owned by the parents to their adult son whose life is insured under the policy...
3 May 2005 Roundtable, 2005-0116681C6 - Transfer of Joint Last-to- Die Policy
The rollover is available where there is a joint-last-to-die policy on the life of a parent and child, and the policy is transferred to the child...
4 May 2004 CALU Roundtable Q. 1, 2004-0065441C6 - Transfer of Multiple Life Policy
The rollover will not be available where there is more than one life insured under the policy even if all the insured lives met the definition of...
15 February 1995 External T.I. 9433865 - DISPOSITION OF LIFE INSURANCE POLICY ON DEATH
S.148(8) does not apply where, on the death of a policyholder, the policy is transferred to the policyholder's child under the terms of the will...
11 July 1989 T.I. (Dec. 89 Access Letter, ¶1059)
The rollover is not available on the transfer of a life insurance policy from a husband who is the basic life insured to his wife who was the...
Subsection 148(8.1) - Inter vivos transfer to spouse
Administrative Policy
10 December 1992 Memorandum (Tax Window, No. 27, p. 8, ¶2339)
Where a taxpayer has elected not to have s. 148(8.1) apply, s. 148(7) will apply. After the passage of Bill C-92, s. 148(8.1) will apply to a...
Subsection 148(8.2) - Transfer to spouse at death
Administrative Policy
10 December 1992 Memorandum (Tax Window, No. 27, p. 8, ¶2339)
Where an election is made not to have s. 148(8.2) apply, s. 148(7) will not apply because of the exclusion for dispositions deemed to occur...
Subsection 148(9) - Definitions
Administrative Policy
27 January 2025 External T.I. 2024-1018491E5 - U.K. Endowment Policy
An individual, while a non-resident, acquired in 1998 a United Kingdom mortgage endowment policy as an investment plan with a life insurance...
Adjusted Cost Basis
See Also
Kratochwil v. The Queen, 2012 DTC 1084 [at at 2917], 2012 TCC 45
The taxpayer, upon redemption of his life insurance policy, was unsuccessful in asserting that his adjusted cost basis was equal to the entire...
Administrative Policy
3 June 2014 External T.I. 2014-0524031E5 - Life insurance policy disposition
[T]he net cost of pure insurance (the "NCPI")… represents the cost the policyholder paid to be covered by insurance during the time he or she...
18 February 2014 External T.I. 2013-0515011E5 - Life insurance premiums and policy loan
A corporate policyholder and beneficiary of an exempt universal life policy on the life of one of its key shareholder pays the premiums on the...
19 September 2006 External T.I. 2006-0170861E5 F - Contrat de rente différé et perte courue
In the course of a general response to a question as to which insufficient facts were provided, CRA stated:
Subsection 148(9) defines the...
4 April 2005 External T.I. 2005-0110941E5 F - Transfert d'une police d'assurance-vie
After indicating that the acquisition by a shareholder of an interest in a corporate life insurance policy for less than the fair market value...
10 October 2003 Roundtable, 2003-0035655 F - CBR D'UNE POLICE D'ASSURANCE TRANSFEREE
A corporation held a life insurance policy on an individual who was a senior executive and shareholder. The death benefit of $1,000,000 was...
30 June 2003 External T.I. 2003-0182875 F - TRANSFERT DE POLICE D'ASSURANCE
A private corporation acquires (and becomes the policyholder of) a permanent life insurance policy on the life of one of its shareholders, pays...
23 March 1992 External T.I. 5-911717
Where one private company is the beneficiary of a life insurance policy taken out by a second holding company on the life of that second company's...
12 November 1991 T.I. (Tax Window, No. 13, p. 5, ¶1592)
Where an individual owns a life insurance policy and pays the premiums, there will be no addition to the corporation's adjusted cost basis of the...
Element A
Administrative Policy
7 October 2011 Roundtable, 2011-0408351C6 F - Honoraire d'évaluation d'une police d'assurance
An actuary is retained to determine the fair market value of a life insurance policy by an individual to a wholly-owned corporation, and the...
4 May 2010 Roundtable, 2010-0359401C6 - Rebate Paid by an Advisor to a Policyholder
In certain provinces, a licensed insurance advisor is permitted to pay a portion of the commission earned as a "rebate" to a client purchasing an...
6 October 2003 External T.I. 2003-0040145 F - TRANSFERT D'UNE POLICE D'ASSURANCE-VIE
A shareholder transferred a universal life insurance policy, that was an exempt policy, on the individual’s life to a wholly-owned corporation...
Element E
Administrative Policy
8 October 2004 APFF Roundtable Q. 5, 2004-0089141C6 F - Compte de dividendes en capital
A corporate owner and beneficiary of a life insurance policy receives a death benefit in the amount of $850,000, less a policy loan of $150,000...
Element L
Administrative Policy
14 October 2004 External T.I. 2004-0089921E5 F - Disposition d'une police d'assurance-vie
In indicating that a refund of premiums on the maturity of a life insurance policy is taxable, where the proceeds of disposition exceed the...
Disposition
Administrative Policy
28 September 2023 CLHIA Roundtable Q. 1, 2023-0971701C6 - Life insurance – contractual changes
Regarding whether an endorsement to provide a new benefit under an in-force exempt life insurance policy for no cost and without any underwriting...
7 October 2022 APFF Financial Strategies and Instruments Roundtable Q. 2, 2021-0895981C6 F - Don d’une partie d’un intérêt dans une police d’assurance-vie en faveur d’un organisme de bienfaisance enregistré
An individual owning a policy on that individual’s life with coverage of $1 million, a cash surrender value (“CSV”) of $250,000 and an...
17 February 2016 External T.I. 2015-0608261E5 - Splitting of a Multiple Life Insurance Policy
Respecting the exercise by a policyholder of a contractual right to split a universal life insurance policy covering two lives into two policies,...
25 February 2003 External T.I. 2002-0138895 - LOAN TO TERMINALLY ILL POLICYHOLDER
While not legally obligated to provide funding to terminally ill policyholders with a life expectancy of less than 24 months, life insurers are...
27 June 1994 Internal T.I. 9407976 - DEFERRED AND PRESCRIBED ANNUITY CONTRACTS
Re: whether the conversion of a deferred annuity contract into a prescribed annuity contract would constitute a disposition of the deferred...
1 November 1994 Internal T.I. 94234170 F - CBR Assurance-vie
A rider to a term life insurance policy amended the policy (in a manner not contemplated in the original policy) to provide that the premiums...
31 January 1994 External T.I. 9336435 F - Disability Benefit and Group Insurance Policy
An amendment to a group insurance policy to pay special disability benefits either as an advance or as a claim in itself would not result in a...
19 March 1992, T.I. 920085 (April 1993 Access Letter, p. 150, ¶C144-206)
The furnishing of outstanding instructions or the making of an election by a policyholder with respect to future withdrawals would not normally...
9 March 1994 External T.I. 9333795 F - Mortgage Insurance Cashback Program
A payment received by a policyholder under a mortgage life insurance policy equal to 10 years of premiums paid under the policy will be considered...
Paragraph (d)
Administrative Policy
19 November 2009 External T.I. 2007-0257251E5 F - Assurance-vie
If a corporation which is the owner and beneficiary of a life insurance policy changes the beneficiary to its subsidiary, does this change result...
Paragraph (e)
Administrative Policy
13 June 2003 External T.I. 2002-0156435 F - ASSURANCE DE MALADIES REDOUTEES
Group insurance contracts included various life insurance benefits as well as a critical illness benefit, which was payable in the event that the...
Paragraph (h)
Administrative Policy
30 November 2006 External T.I. 2006-0191541E5 F - Primes d'assurance-vie et d'assurance-invalidité
A business receives a loan from a financial institution that requires the borrower to take out a disability insurance policy to secure the loan. ...
12 April 2001 External T.I. 2000-0050655 F - ASSURANCE MUTILATION/INVALIDITE
Regarding the taxation of an insurance benefit following being maimed (a “dismemberment”), CCRA indicated that “[w]here an insurance policy...
Paragraph (j)
Administrative Policy
8 July 2020 CALU Roundtable Q. 2, 2020-0842141C6 - Return of premiums on death & CDA
A private corporation is the owner and beneficiary of an exempt life insurance policy (with an adjusted cost basis of $90,000) on the life of a...
30 November 2006 External T.I. 2006-0191541E5 F - Primes d'assurance-vie et d'assurance-invalidité
A business receives a loan from a financial institution that requires the borrower to take out a life insurance policy to secure the loan. CRA...
Policy Loan
Administrative Policy
10 October 2003 Roundtable, 2003-0037125 F - AVANCE SUR POLICE
Under the terms of a universal life insurance policy, the policyholder may withdraw an amount, which reduces the amount of the benefit payable at...
10 January 2002 External T.I. 2001-0112885 F - ASSURANCE-VIE ET PRET REMBOURSE AU DECES
Regarding a life insurance policy pledged by the taxpayer’s corporation to borrow from a bank a series of amounts to be repaid only after the...
3 July 1991 T.I. (Tax Window, No. 5, p. 15, ¶1333)
A loan made by an insurance company to a policy holder under a formal agreement similar to that used by a bank or trust company nonetheless would...
Proceeds of the Disposition
Administrative Policy
21 January 2025 External T.I. 2024-1041441E5 - Return of Premium Life Insurance Policy
In response to a query as to why the taxpayer was issued at T5 slip for the receipt on the maturity of a term life insurance policy of a return of...
18 February 2014 External T.I. 2013-0515011E5 - Life insurance premiums and policy loan
A corporate policyholder and beneficiary of an exempt universal life policy on the life of one of its key shareholder pays the premiums on the...
9 July 2012 External T.I. 2012-0438751E5 F - Police d'assurance-vie
Does a taxpayer have to include an amount in computing income when settling the taxpayer's life insurance policy at age 65 (before death)? In...
1 March 2004 External T.I. 2003-0060381E5 F - Police d'assurance exonérée
In the course of a general discussion, CRA stated:
An insurance policyholder who disposes of an interest in a life insurance policy must include...
Paragraph (b)
Administrative Policy
30 May 2006 Internal T.I. 2006-0175401I7 F - Assurance-vie donnée en garantie
A corporation acquires a universal life insurance policy on the life of its shareholder, with the amount of the insurance coverage and the cash...
Paragraph (d)
Administrative Policy
6 January 2005 Internal T.I. 2004-0100241I7 F - Imposition des rentes au décès
Regarding the taxation of a non-prescribed annuity contracts on the death of the holder and annuitant (the "Annuitant") which is not subject to a...
Subsection 148(10)
Paragraph 148(10)(d)
Administrative Policy
17 February 2016 External T.I. 2015-0608261E5 - Splitting of a Multiple Life Insurance Policy
The taxpayer is the policyholder of a universal life insurance policy providing life insurance coverage on the lives of the taxpayer and the...
19 November 2009 External T.I. 2007-0257251E5 F - Assurance-vie
If a corporation which is the owner and beneficiary of a life insurance policy changes the beneficiary to its subsidiary, does this change result...