CRA Position

"The CRA is not prepared to reconsider its views on the application of subsections 15(1), 56(2) and 246(1) to life insurance policies where a corporation is the policyholder and premium payor and the beneficiary is a different taxpayer. The CRA has previously opined that where a corporation is both the policyholder and the sole beneficiary of a life insurance policy on the life of a shareholder, payment of the premiums would not ordinarily constitute a taxable benefit to the shareholder under subsection 15(1). The CRA remains of the view that whether a benefit has been conferred for purposes of subsections 15(1), 56(2) or 246(1) is a question of fact determined on a case-by-case basis. The determination requires a comprehensive review of the relevant facts and agreements, including beneficiary designations, premium payments, insurance coverage and valuation considerations, as well as the objective of the tax planning and the express or implied intent of the parties."