,canada ,cu/oms                       #a
& ,rev5ue ,ag5cy

          ,9t]pret,n ,bullet9
    
,subject3 ,9come ,tax ,act
  ,gifts 0,9dividuals ( ,life ,9sur.e
  ,policies z ,*>ita# ,don,ns
,numb]3 ,,it-#bdd;,r#c
,date3 ,septemb] #f1 #aiia
,ref];e3 ,sec;n #aah.a 7al subsec;ns
  #adh7#a7 & #bdh7#e71 p>agraph
  #adi.a7#b77b71 subp>agraph
  #adi.a7#ab77b77;i7 & clause
  #adi.a7#a77e77;i77,b77

               ,applic,n
    
  ,? bullet9 c.els & replaces ,9t]pret,n
,bullet9 ,,it-#bdd;,r#b dat$ ,m>* #c1
#aihf4 ,curr5t revi.ns >e designat$
0v]tical l9es4


                                      #a
                ,summ>y              a#a
    
  ,? bullet9 4cusses ! tax 3sequ;es >is+
f ! don,n 0an 9dividual (a life 9sur.e
policy 6a *>ita# organiz,n or a *>ita#
f.d,n regi/]$ )! ,m9i/] ( ,n,nal
,rev5ue4 ,:5 an 9dividual absolutely
assigns a life 9sur.e policy 6a regi/]$
*>;y & makes ! *>;y ! regi/]$ b5efici>y
(! policy1 ! 9dividual qualifies =! tax
relief applica# 6*>ita# gifts 9 respect
( s* a don,n4 ,fur!rmore1 if ! 9dividual
3t9ues 6pay ! premium on ! life 9sur.e
policy1 ea* am.t s pd al qualifies z a
*>ita# gift 9 ! ye>4 ,= #aihh &
subsequ5t tax,n ye>s1 don,ns made 0an
9dividual >e no l;g] deducti# 9 -put+
taxa# 9come2 tax relief is n[ provid$
69dividuals 9 ! =m (a non-refunda# tax
cr$it4




                                      #b
          ,4cus.n & ,9t]pret,n       b#a
            7p>agraphs #a-e7
    
#a4 ,a gift 0an 9dividual (a life 9sur.e
  policy 7bo? 8:ole life0 & 8t]m life07
  6a regi/]$ *>;y or any o!r donee
  describ$ 9 any ( p>agraphs 7a7 to 7g7
  (! def9i;n ( 8total *>ita# gifts0 9
  subsec;n #aah.a7#a7 (! ,9come ,tax
  ,act is 3sid]$ 6be a *>ita# gift )9 !
  3text ( t subsec;n4 ,"!=e1 s* a gift
  5titles ! donor 6a tax cr$it 7)9 !
  limits provid$ 0! ,act7 9 respect (!
  value (! gift1 z 4cuss$ 9 #c 2l1
  provid$ ! policy has be5 absolutely
  assign$ 6! donee &! donee has 2come !
  regi/]$ b5efici>y (! policy4 7,= #aihg
  & prior tax,n ye>s1 ! value ( s* a
  gift 0 deducti# 9 -put+ taxa# 9come =!
  ye> z 0 !n provid$ "u ! ,act47 ,9 ord]
  =! gift (a life 9sur.e policy
  6repres5t a bona fide *>ita# gift1
--------------------------------------#b
  no "r1 privilege1 b5efit or advantage
  c a3rue 6! donor z a result (!      #c
             ,,it-#bdd;,r#c          a#b
  gift 7exclud+1 ( c\rse1 any 9come tax
  relief result+ f ! don,n74
#b4 ,": ^! 3di;ns >e met1 an am.t donat$
  6a donee ref]r$ 6in #a abv 65a# !
  donee 6pay ! premiums (! life 9sur.e
  policy is al a *>ita# gift4 ,if !
  premiums on ! policy >e pd directly 6!
  9sur.e -pany at ! reque/ (1 or )!
  3curr;e (1 ! donee1 ? ac;n is 3sid]$
  6be 3/ructive pay;t (a don,n 6! donee
  & "!=e a *>ita# gift =! purposes (!
  ,act4 ,fur!rmore1 ! fact t a donor
  makes a ca% 3tribu;n 6a donee &
  specifies t x 2 us$ 6pay a premium on
  a life 9sur.e policy does n 9flu;e !
  det]m9,n ( :e!r or n ! don,n qualifies
  z a gift "u subsec;n #aah.a7#a74
#c4 ,:5 a taxpay] has tak5 \ a life
  9sur.e policy & lat] makes an absolute
  assign;t (! policy 6a qualifi$ donee
  "u subsec;n #aah.a7#a71 ! am.t (!
  *>ita# gift is equal 6! value (!
  policy 7i4e41 ! am.t 0: ! ca% surr5d]
  value (! policy at ! "t (!          #d
             ,,it-#bdd;,r#c          b#b
  absolute assign;t exce$s any policy
  loan \t/&+7 & any a3umulat$ divid5ds &
  9t]e/ : >e al assign$ at t "t4 ,if !
  policy has no value1 "! is no *>ita#
  gift :5 x is transf]r$1 b don,ns (
  subsequ5t premium am.ts w qualify z
  *>ita# gifts 9 a3ord.e ) #b abv4 ,x %d
  2 not$ t ! 9cr1se 9 ! ca% surr5d]
  value (! policy z a result (!
  subsequ5t pay;ts ( policy premiums has
  no e6ect 9 det]m9+ ! am.t (! don,n
  once ! policy has be5 absolutely
  assign$ 6! qualifi$ donee4 ,h["e1 !
  repay;t ( any \t/&+ policy loans 0!
  donor af ! policy has be5 absolutely
  assign$ 6! qualifi$ donee w 5title !
  donor 6a tax cr$it 9 respect (! am.t
  repd4
#d4 ,:5 a life 9sur.e policy is
  absolutely assign$ 6a qualifi$ donee1
  any 3s5ts t >e requir$ 0prov9cial
  regul,ns 6be sign$ 6*ange a b5efici>y
  m/ 2 sign$ 2f "! is a valid *>ita#
  gift4                               #e
             ,,it-#bdd;,r#c          c#b
#e4 ,a donor :o assigns a life 9sur.e
  policy 9 a3ord.e )! t]ms ( ? bullet9
  m/ 3sid] ! implic,ns ( sec;n #adh (!
  ,act4 ,=! purpose ( subsec;n #adh7#a71
  x is 3sid]$ t ! donor's proce$s (
  4posi;n (! life 9sur.e policy w 2 !
  value (! policy at ! "t (! assign;t
  7see #c abv74 ,6! ext5t t !
--------------------------------------#c
  proce$s ( 4posi;n exce$ ! adju/$ co/
  basis (! policy1 "! w 2 an 9come
  9clu.n4 7,any a3umulat$ divid5ds
  assign$ wd h be5 proce$s ( 4posi;n (!
  policy at ! "t ( 5title;t1 z 4cuss$ 9
  ! curr5t v].n ( ,,it-#hg1
  ,policyhold]s' ,9come f ,life ,9sur.e
  ,policies47

       ,receipt 0,c]ta9 ,qualifi$
        ,donee 7p>agraphs #f-h7
    
#f4 ,": a regi/]$ *>;y rcvs a gift
  subject 6a tru/ or direc;n 0a donor t
  ! prop]ty giv51 or prop]ty          #f
             ,,it-#bdd;,r#c          a#c
  sub/itut$ "!=1 is 6be held 0! *>;y =a
  p]iod ( n less ?an #aj ye>s1 ! gift is
  exclud$ f ! 9come (! *>;y 0virtue (
  subp>agraph #adi.a7#ab77b77;i7 (!
  ,act4 ,clause #adi.a7#a77e77;i77,b7
  ref]r$ 6in t subp>agraph provides a
  specific exemp;n ( s* prop]ty f !
  4burse;t quota (a *>ita# f.d,n &
  p>agraph #adi.a7#b77b7 e6ectively
  ext5ds ! same provi.n 6a *>ita#
  organiz,n's sp5d+ require;ts4 ,"!=e1
  provid$ t a tru/ /ipulates1 or ! donor
  directs1 t ! gift 2 held = at l1/ #aj
  ye>s1 ! value (a life 9sur.e policy &!
  proce$s f ! policy1 :e!r on volunt>y
  4posi;n or ^u ! d1? (! life 9sur$1 w 2
  exempt f ! 4burse;t quota set \ 9 !
  ,act4 ,! rules respect+ s* direc;ns >e
  4cuss$ 9 ! curr5t v].n ( ,9=m,n
  ,circul> #hj-aj "u ! h1d+ 8,t5 ,ye>
  ,gifts04
#g4 ,0virtue ( subsec;n #bdh7#e71 !
  phrase 8prop]ty sub/itut$ "!=0 9
  clause #adi.a7#a77e77;i77,b7 is n   #g
             ,,it-#bdd;,r#c          b#c
  limit$ 6"o sub/itu;n b w apply 6any
  subsequ5t sub/itu;n "!=4
#h4 ,": a gift (a life 9sur.e policy
  qualifies = exclu.n f ! *>;y's 9come &
  4burse;t quota z 4cuss$ 9 #f abv1 !
  am.t ( subsequ5t premiums donat$
  relative 6t life 9sur.e policy 7see #b
  abv7 w al qualify = s* exclu.ns4 ,x %d
  2 not$1 h["e1 t s9ce ea* pay;t (a
  premium is xf a gift1 ea* pay;t m/ 2
  subject 6a direc;n t x 2 reta9$ = #aj
  ye>s if t gift is 6be exclud$ f 9come
  or f ! 4burse;t quota4 ,"o way (
  a*iev+ ? is =! donor1 at ! "t ! policy
  is giv51 6require ! *>;y 6keep !
  policy1 or prop]ty sub/itut$ f !
  policy1 = at l1/ #aj ye>s af ! la/
  premium is pd 0! donor4





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