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

Regulations are current to 2014-06-12 and last amended on 2014-05-16. Previous Versions

Life Annuity Contracts

  •  (1) For the purposes of this Part and section 148 of the Act, “life annuity contract” means a contract under which a person authorized under the laws of Canada or of a province to carry on in Canada an annuities business agrees to make annuity payments to one person or partnership (in this section referred to as “the annuitant”) or jointly to two or more annuitants, which annuity payments are, under the terms of the contract,

    • (a) to be paid annually or at more frequent periodic intervals;

    • (b) to commence on a specified day; and

    • (c) to continue throughout the lifetime of one or more individuals (each of whom is referred to in this section as “the identified individual”).

  • (2) For the purposes of subsection (1), a contract shall not fail to be a life annuity contract by reason that

    • (a) the contract provides that the annuity payments may be assigned by the annuitant or owner;

    • (b) the contract provides for annuity payments to be made for a period ending on the death of the identified individual or for a specified period of not less than 10 years, whichever is the lesser;

    • (c) the contract provides for annuity payments to be made for a specified period or throughout the lifetime of the identified individual, whichever is longer, to the annuitant and, if the specified period is longer, to a specified person after that period;

    • (d) the contract provides, in addition to the annuity payments to be made throughout the lifetime of the identified individual, for a payment to be made on the death of the identified individual;

    • (e) the contract provides that the date

      • (i) on which the annuity payments commence, or

      • (ii) on which the contract holder becomes entitled to proceeds of the disposition,

      may be changed with respect to the whole contract or any portion thereof at the option of the annuitant or owner; or

    • (f) the contract provides that all or a portion of the proceeds payable at any particular time under the contract may be received in the form of an annuity contract other than a life annuity contract.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/80-341, s. 1;
  • SOR/82-499, s. 2;
  • SOR/83-865, s. 2;
  • SOR/2011-188, s. 7.

 [Repealed, SOR/83-865, s. 3]

  •  (1) Where in a taxation year the rights of a holder under an annuity contract cease upon termination or cancellation of the contract and

    • (a) the aggregate of all amounts, each of which is an amount in respect of the contract that was included in computing the income of the holder for the year or any previous taxation year by virtue of subsection 12(3) of the Act

    exceeds the aggregate of

    • (b) such proportion of the amount determined under paragraph (a) that the annuity payments made under the contract before the rights of the holder have ceased is of the total of the payments expected to be made under the contract, and

    • (c) the aggregate of all amounts, each of which is an amount in respect of the contract that was deductible in computing the income of the holder for the year or any previous year by virtue of subsection (2),

    the amount of such excess may be deducted by the holder under subsection 20(19) of the Act in computing his income for the year.

  • (2) For the purposes of subsection 20(19) of the Act, where an annuity contract was acquired after December 19, 1980 and annuity payments under the contract commenced before 1982, the amount that may be deducted by a holder under that subsection in respect of an annuity contract for a taxation year is that proportion of

    • (a) the aggregate of all amounts, each of which is an amount that was included in computing the income of the holder for any previous taxation year by virtue of subsection 12(3) of the Act in respect of the contract

    that

    • (b) the aggregate of all annuity payments received by the holder in the year in respect of the contract

    is of

    • (c) the total of the payments determined under paragraph 300(1)(a) or (b) in respect of the holder’s interest in the contract.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/82-499, s. 3;
  • SOR/83-865, s. 4.