Words and Phrases - "life annuity"
2 August 2002 External T.I. 2002-0152445 F - RENTE VIAGERE ET CREDIT
In finding that a child was not entitled to a pension income tax credit pursuant to s. 118(3) in respect of an annuity received from a pension plan following the death of his father, CCRA stated:
The term "life annuity" is not defined in the Act and must be given its ordinary meaning. Article 2371 of the Civil Code of Québec provides that a life annuity is an annuity payable for a duration limited to the lifetime of one or several persons. In our view, an annuity that is paid to a person until that person reaches a certain age and then ceases to be paid is not a life annuity.
Scott Estate v. The Queen, 88 DTC 6012 (FCTD)
A lump sum payment in commutation of amounts owing under income-averaging annuity contracts did not constitute a payment under a "life annuity", which was defined inter alia for purposes of the 1942 Canada-U.S. Income Tax Convention as "a stated sum payable periodically at stated times during life."
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 23 |