Professionals practising through a professional corporation hold a group term life insurance certificate as an insured, for which the policyholder is a professional association of which the insured is a member. They transfer the insurance certificate to their corporation so that it pays the premiums and receives the insurance proceeds on their death.
If the certificate continued to be issued in the name of the individual member of the professional association but the corporation paid the premiums and was designated as the beneficiary of the insurance proceeds, would there be a s.15(1) benefit? CRA responded:
It is possible that the transactions described in the question may be carried out for reasons other than business reasons, or in other words for personal reasons (including reducing the tax burden on individuals). It is possible that subsection 15(1) is applicable, depending on the facts.