Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues:
Writer seeking "the interpretation bulletin on UL policies".
Position:
There is no bulletin on UL insurance. Writer referred to bulletins pertaining to life insurance products in general.
Reasons:
Tax treatment of universal life products depends upon the terms and conditions of the particular contracts, which vary tremendously between policyholders.
XXXXXXXXXX 2003-002943
October 14, 2003
Dear XXXXXXXXXX:
Re: Request from Licensed Life Insurance Rep
This is in response to your e-mails of July 12, 2003 and July 30, 2003 having the above-noted subject line. Your e-mail of July 12, 2003 requested that we provide "information on the current ruling regarding U.L. Universal Life Policies - re Tax Deferred Investment within this type of policy". Your e-mail dated July 30, 2003 clarified that that you are seeking "the Int. Bulletin referring to UL".
Unfortunately, there is no interpretation bulletin that deals specifically with universal life products. As you know, universal life policies by their nature are designed to be flexible and hence their terms and provisions can vary tremendously between policyholders. In view of the broad range of universal life products, the Canada Customs and Revenue Agency ("CCRA") has not published any guidelines that could be expected to apply generally to universal life products. However, the CCRA has issued several interpretation bulletins that apply to life insurance policies and policyholders in general. We would refer you in this respect to IT-87R2, "Policyholders' Income from Life Insurance Policies", draft IT-430R3, "Life Insurance Proceeds Received by a Private Corporation or a Partnership as a Consequence of Death", IT-309R2, "Premiums on Life Insurance Used as Collateral", IT-355R2, "Interest on Loans to Buy Life Insurance Policies and Annuity Contracts, and Interest on Policy Loans" and IT-244R3, "Gifts by Individuals of Life Insurance Policies as Charitable Donations". These bulletins may be obtained from the CCRA's website at http://www.ccra-adrc.gc.ca/menu/ITSC-e.html.
The tax treatment of specific universal life policies depends upon the terms and conditions of the particular contract or arrangement. Should you have a specific question pertaining to universal life policies, you may choose to seek an advance income tax ruling or a technical interpretation, if appropriate to the circumstances. CCRA Information Circular 70-6R5, "Advance Income Tax Ruling" discusses these services, and other services provided by the Income Tax Rulings Directorate. This circular may be obtained from the CCRA's website at http://www.ccra-adrc.gc.ca/menu/ICSC-e.html.
Yours truly,
F. Lee Workman
Manager
Financial Institutions Section
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2003
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2003
Email this Content