Subsection 217(2)
Administrative Policy
18 September 2025 CLHIA Roundtable Q. 6, 2025-1067961C6 - Transfer of a life insurance policy
insurance company is expected to keep track of ACB increase for s. 15(1) or 6(1)(a) benefit
After indicating that on a life insurance policy’s gratuitous transfer by a corporation to a shareholder/executive, the policy’s ACB to that individual is increased by the excess of the policy’s FMV over the deemed s. 148(7) proceeds, CRA referred to the reporting requirements of the insurance company under Reg. 217(2), and stated:
Although not a party to the disposition, we would expect an insurer to be aware of any changes to the policyholder arising from a disposition of a life insurance policy to ensure that the policy continues to be in effect and make any necessary adjustments to the ACB as appropriate.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 148 - Subsection 148(9) - Adjusted Cost Basis - Element C | on a life insurance policy’s gratuitous transfer to a shareholder/executive, the policy’s ACB to that individual is increased by the excess of the policy’s FMV over the deemed s. 148(7) proceeds | 257 |
| Tax Topics - Income Tax Act - Section 148 - Subsection 148(7) | 2 examples of application of s. 148(7) where shareholder or employee benefit | 289 |