Principal Issue: [TaxInterpretations translation]
Is a particular annuity contract a life annuity contract as defined in Regulation 301 of the Act?
Position: No
Reason:
The text of this provision does not allow this interpretation.
FINANCIAL PRODUCTS ROUNDTABLE
APFF - CONFERENCE 2003
Question 9
Life annuity contracts
There are situations where an annuity may be payable during an individual's lifetime when that individual is not the beneficiary of the annuity payments. The individual 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. Such an annuity contract is not a prescribed annuity contract and is therefore subject to the rules in section 12.2.
Can this annuity contract be considered a life annuity contract within the meaning of section 301 of the Income Tax Regulations?
CCRA Response
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.
Michelle Desrosiers
October 10, 2003
2003-003713