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 Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Income tax implications of critical illness product
Position: Unable to comment at this time
Reasons: Require a particular product
XXXXXXXXXX 973025
Attention: XXXXXXXXXX
February 9, 1998
Dear Sirs:
Re: Critical Illness Insurance
This is in reply to your November 14, 1997 letter wherein you requested that we consider various aspects of a critical illness product XXXXXXXXXX. We apologize for the delay in responding
You asked us in your letter for any interpretation bulletins, advanced income tax rulings, technical interpretation, or any other documents dealing with the taxation of various benefits which may be offered in products dealing with critical illness which may be of assistance to you in your review. To our knowledge the taxation of critical illness products has not yet been the subject of a review by this Department. As a result, there are no documents published by our Department on this issue available at this time other than our June 2, 1997 letter to you with respect to our general comments on critical illness insurance to be provided to employees on a group basis. As you are most likely aware a few technical interpretations have been issued by our Department dealing with terminal illness and disability insurance in general but not dealing specifically with critical illness.
Until such time as we are able to review critical illness products either by way of an advance income tax ruling with respect to a proposed product or by way of the audit of issued products we are unable to comment on the interpretation which has been made by the industry with respect to these products. The income tax implications can only be determined after a review of all the terms and conditions of a particular product.
Should you wish to proceed with a request for an advance income tax ruling with respect to the product you are currently developing it should be submitted in the manner set out in Information Circular 70-6R3 dated December 30, 1996. As noted, in considering such a request, the Department would require a complete description of all the relevant facts and documentation relating to the proposed transactions to be entered into by the parties.
We hope our comments are of assistance to you.
Yours truly,
F. Lee Workman
Section Chief
Financial Institutions Section
Financial Industries Division
Income Tax Rulings & Interpretation Directorate
Policy & Legislation Branch
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