Where an annuity may be payable during the lifetime of an individual, who may be an employee or shareholder of a corporation, and the corporation is the purchaser and owner of the annuity contract and is also the beneficiary of the annuity payments, will the annuity contract be considered a life annuity contract within the meaning of Reg. 301? CCRA responded:
Such an annuity contract is not a "life annuity contract" within the meaning of ITR section 301 since it does not meet the conditions set out in that provision.
The definition of "life annuity contract" under ITR section 301 stipulates, inter alia, that annuity payments are made to an individual referred to for the purposes of that section as "the annuitant" and that such payments must continue throughout the lifetime of the annuitant. In the present situation, the annuity payments are made to a corporation and not to an individual as required by ITR section 301.