Income Tax Regulations (C.R.C., c. 945)

Regulations are current to 2015-08-30 and last amended on 2015-07-01. Previous Versions

Mean Canadian Investment Fund

  •  (1) For the purposes of this Part, the mean Canadian investment fund of an insurer for a particular taxation year is the total of

    • (a) 50% of the total of

      • (i) its Canadian investment fund at the end of the particular year, and

      • (ii) either,

        • (A) if the insurer is resident in Canada, its Canadian investment fund at the end of its preceding taxation year, or

        • (B) if the insurer is non-resident, its Canadian investment fund at the end of its preceding taxation year determined as if its attributed surplus for that preceding taxation year were its attributed surplus for the particular year, and

    • (b) the insurer’s cash-flow adjustment for the particular year.

Cash-flow Adjustment

  • (2) An insurer’s cash-flow adjustment for a taxation year is the amount equal to

    • (a) if the year ended two months or more after it began, the positive or negative amount determined by the formula

      50% x (A - B / C)

      where

      A 
      is the total of all amounts each of which is the amount determined under subsection (3) in respect of a full month in the year (or in respect of the part of the month that ends after the last full month in the year, if that part is greater than 15 days),
      B 
      is the total of all amounts each of which is the amount determined in respect of a full month in the year (or in respect of the part of the month that ends after the last full month in the year, if that part is greater than 15 days) by the formula

      D x (1 + 2E)

      where

      D 
      is the amount determined under subsection (3) in respect of the month or part of the month, and
      E 
      is the number of months in the year that ended before the beginning of the month or part of the month, and
      C 
      is the number of full months in the year (plus 1, if the year ends more than 15 days after the end of the last full month in the year); and
    • (b) if the year ended less than two months after it began, nil.

Amounts Paid and Received

  • (3) The amount determined in respect of an insurer for a particular month or part of a month (in this subsection referred to as a “month”) in a taxation year is the positive or negative amount determined by the formula

    G - H

    where

    G 
    is the total of all amounts each of which is
    • (a) the amount of a premium or consideration received by the insurer in the month in respect of a contract of insurance (including a settlement annuity) entered into in the course of carrying on its insurance businesses in Canada,

    • (b) an amount received by the insurer in the month in respect of interest on or a repayment in respect of a policy loan made under a life insurance policy in Canada, or

    • (c) an amount received by the insurer in the month in respect of reinsurance (other than reinsurance undertaken to effect a transfer of a business in respect of which subsection 138(11.5), (11.92) or (11.94) of the Act applies) arising in the course of carrying on its insurance businesses in Canada; and

    H 
    is the total of all amounts each of which is
    • (a) the amount of a claim or benefit (including a payment under an annuity or settlement annuity, a payment of a policy dividend and an amount paid on a lapsed or terminated policy), a refund of premiums, a premium or a commission paid by the insurer in the month under a contract of insurance in the course of carrying on its insurance businesses in Canada,

    • (b) the amount of a policy loan made by the insurer in the month under a life insurance policy in Canada, or

    • (c) an amount paid by the insurer in the month in respect of reinsurance (other than reinsurance undertaken to effect a transfer of a business in respect of which subsection 138(11.5), (11.92) or (11.94) of the Act applies) in the course of carrying on its insurance businesses in Canada.

  • (4) A reference to a “month” in this section means

    • (a) if an insurer’s taxation year does not begin on the first day of a calendar month and the insurer elects to have this paragraph apply for the year, the period beginning on the day in a calendar month that has the same calendar number as the particular day on which the taxation year began and ending

      • (i) on the day immediately before the day in the next calendar month that has the same calendar number as the particular day, or

      • (ii) if the next calendar month does not have a day that has the same calendar number as the particular day, the last day of that next calendar month; and

    • (b) in any other case, a calendar month.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/90-661, s. 10;
  • SOR/94-686, s. 55(F);
  • SOR/2000-413, s. 7.