Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Act current to 2015-08-30 and last amended on 2015-08-01. Previous Versions

Marginal note:Mutual holding corporations

 Where at any time a mutual holding corporation (as defined in subsection 139.1(1)) in respect of an insurance corporation distributes property to a policyholder of the insurance corporation, the mutual holding corporation is deemed to have paid, and the policyholder is deemed to have received from the mutual holding corporation, at that time a dividend on shares of the capital stock of the mutual holding corporation, equal to the fair market value of the property.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2000, c. 19, s. 38.
Marginal note:Deductions in computing income
  •  (1) In computing the income for a taxation year of an insurance corporation, whether a mutual corporation or a joint stock company, from carrying on an insurance business other than a life insurance business, there may be deducted every amount credited in respect of that business for the year or a preceding taxation year to a policyholder of the corporation by way of a policy dividend, refund of premiums or refund of premium deposits if the amount was, during the year or within 12 months thereafter,

    • (a) paid or unconditionally credited to the policyholder; or

    • (b) applied in discharge, in whole or in part, of a liability of the policyholder to pay premiums to the corporation.

  • Marginal note:Inclusion in computing income

    (2) There shall be included in computing the income of an insurance corporation, whether a mutual corporation or a joint stock company, from carrying on an insurance business for its first taxation year that commences after June 17, 1987 and ends after 1987 (in this subsection referred to as its “1988 taxation year”) the amount, if any, by which

    • (a) the total of all amounts each of which is an amount deducted by the corporation in computing its income for a taxation year ending before its 1988 taxation year pursuant to paragraph 140(c) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, or pursuant to that paragraph by reason of subparagraph 138(3)(a)(v) of that Act as it read in respect of those taxation years in respect of amounts credited to the account of the policyholder on terms that the policyholder is entitled to payment thereof on or before the expiration or termination of the policy

    exceeds

    • (b) the total of all amounts each of which is an amount paid or unconditionally credited to a policyholder or applied in discharge, in whole or in part, of a liability of the policyholder to pay premiums to the corporation before the corporation’s 1988 taxation year in respect of the amounts credited to the account of the policyholder referred to in paragraph 140(2)(a).

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 140;
  • 2000, c. 19, s. 39.
Marginal note:Definitions
  •  (1) In this section, “demutualization” and “holding corporation” have the same meaning as in subsection 139.1(1).

  • Marginal note:Life insurance corporation deemed to be public corporation

    (2) Notwithstanding any other provision of this Act, a life insurance corporation that is resident in Canada is deemed to be a public corporation.

  • Marginal note:Holding corporation deemed to be public corporation

    (3) A corporation resident in Canada that is a holding corporation because of its acquisition of shares in connection with the demutualization of a life insurance corporation resident in Canada is deemed to be a public corporation at each time in the specified period of the holding corporation at which the holding corporation would have satisfied conditions prescribed under subparagraph (b)(i) of the definition “public corporation” in subsection 89(1) if the words “shareholders, the dispersal of ownership of its shares and the public trading of its shares” in that subparagraph were read as “shareholders and the dispersal of ownership of its shares”.

  • Marginal note:Specified period

    (4) For the purpose of subsection (3), the specified period of a corporation

    • (a) begins at the time the corporation becomes a holding corporation; and

    • (b) ends at the first time the corporation is a public corporation because of any provision of this Act other than subsection (3).

  • Marginal note:Exclusion from taxable Canadian property

    (5) For the purpose of paragraph (d) of the definition “taxable Canadian property” in subsection 248(1), a share of the capital stock of a corporation is deemed to be listed at any time on a designated stock exchange if

    • (a) the corporation is

      • (i) a life insurance corporation resident in Canada that has demutualized and that, at that time, would have satisfied conditions prescribed under subparagraph (b)(i) of the definition “public corporation” in subsection 89(1) if the words “shareholders, the dispersal of ownership of its shares and the public trading of its shares” in that subparagraph were read as “shareholders and the dispersal of ownership of its shares”, or

      • (ii) a holding corporation that is deemed by subsection (3) to be a public corporation at that time;

    • (b) no share of the capital stock of the corporation is listed on any stock exchange at that time; and

    • (c) that time is not later than six months after the time of the demutualization of

      • (i) the corporation, where the corporation is a life insurance corporation, and

      • (ii) in any other case, the life insurance corporation in respect of which the corporation is a holding corporation.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 141;
  • 2000, c. 19, s. 40;
  • 2001, c. 17, s. 135;
  • 2007, c. 35, s. 44.