VIII, s. 861997, c. 25, s. 451998, c. 19, ss. 40, 1752000, c. 12, s. 1422001, c. 17, s. 1442013, c. 34, s. 3042017, c. 33, s. 592021, c. 23, s. 36
147.4(1)Where(a)at any time an individual acquires, in full or partial satisfaction of the individual’s entitlement to benefits under a registered pension plan, an interest in an annuity contract (other than an advanced life deferred annuity) purchased from a licensed annuities provider,(b)the rights provided for under the contract are not materially different from those provided for under the plan as registered,(c)the contract does not permit premiums to be paid at or after that time, other than a premium paid at that time out of or under the plan to purchase the contract,(d)either the plan is not a plan in respect of which the Minister may, under subsection 147.1(11), give a notice of intent to revoke the registration of the plan or the Minister waives the application of this paragraph with respect to the contract and so notifies the administrator of the plan in writing, and(e)the individual does not acquire the interest as a consequence of a transfer of property from the plan to a registered retirement savings plan or a registered retirement income fund,the following rules apply for the purposes of this Act:(f)the individual is deemed not to have received an amount out of or under the registered pension plan as a consequence of acquiring the interest, and(g)other than for the purposes of sections 147.1 and 147.3, any amount received at or after that time by any individual under the contract is deemed to have been received under the registered pension plan.Marginal note:Amended contract(2)Where(a)an amendment is made at any time to an annuity contract to which subsection (1) or paragraph 254(a) applies, other than an amendment the sole effect of which is to(i)defer annuity commencement to no later than the end of the calendar year in which the individual in respect of whom the contract was purchased attains 71 years of age, or(ii)enhance benefits under the annuity contract in connection with the demutualization (as defined by subsection 139.1(1)) of an insurance corporation that is considered for the purpose of section 139.1 to have been a party to the annuity contract, and(b)the rights provided for under the contract are materially altered as a consequence of the amendment,the following rules apply for the purposes of this Act:(c)each individual who has an interest in the contract immediately before that time is deemed to have received at that time the payment of an amount under a pension plan equal to the fair market value of the interest immediately before that time,(d)the contract as amended is deemed to be a separate annuity contract issued at that time otherwise than pursuant to or under a superannuation or pension fund or plan, and(e)each individual who has an interest in the separate annuity contract immediately after that time is deemed to have acquired the interest at that time at a cost equal to the fair market value of the interest immediately after that time.Marginal note:New contract(3)For the purposes of this Act, where an annuity contract (in this subsection referred to as the “original contract”) to which subsection 147.4(1) or paragraph 254(a) applies is, at any time, substituted by another contract,(a)if the rights provided for under the other contract(i)are not materially different from those provided for under the original contract, or(ii)are materially different from those provided for under the original contract only because of an enhancement of benefits that can reasonably be considered to have been provided solely in connection with the demutualization (as defined by subsection 139.1(1)) of an insurance corporation that is considered for the purposes of section 139.1 to have been a party to the original contract,the other contract is deemed to be the same contract as, and a continuation of, the original contract; and(b)in any other case, each individual who has an interest in the original contract immediately before that time is deemed to have received at that time the payment of an amount under a pension plan equal to the fair market value of the interest immediately before that time.(4)[Repealed, 2007, c. 29, s. 21]
(a)at any time an individual acquires, in full or partial satisfaction of the individual’s entitlement to benefits under a registered pension plan, an interest in an annuity contract (other than an advanced life deferred annuity) purchased from a licensed annuities provider,(b)the rights provided for under the contract are not materially different from those provided for under the plan as registered,(c)the contract does not permit premiums to be paid at or after that time, other than a premium paid at that time out of or under the plan to purchase the contract,(d)either the plan is not a plan in respect of which the Minister may, under subsection 147.1(11), give a notice of intent to revoke the registration of the plan or the Minister waives the application of this paragraph with respect to the contract and so notifies the administrator of the plan in writing, and(e)the individual does not acquire the interest as a consequence of a transfer of property from the plan to a registered retirement savings plan or a registered retirement income fund,
(f)the individual is deemed not to have received an amount out of or under the registered pension plan as a consequence of acquiring the interest, and(g)other than for the purposes of sections 147.1 and 147.3, any amount received at or after that time by any individual under the contract is deemed to have been received under the registered pension plan.
(a)an amendment is made at any time to an annuity contract to which subsection (1) or paragraph 254(a) applies, other than an amendment the sole effect of which is to(i)defer annuity commencement to no later than the end of the calendar year in which the individual in respect of whom the contract was purchased attains 71 years of age, or(ii)enhance benefits under the annuity contract in connection with the demutualization (as defined by subsection 139.1(1)) of an insurance corporation that is considered for the purpose of section 139.1 to have been a party to the annuity contract, and(b)the rights provided for under the contract are materially altered as a consequence of the amendment,
(i)defer annuity commencement to no later than the end of the calendar year in which the individual in respect of whom the contract was purchased attains 71 years of age, or(ii)enhance benefits under the annuity contract in connection with the demutualization (as defined by subsection 139.1(1)) of an insurance corporation that is considered for the purpose of section 139.1 to have been a party to the annuity contract, and
(c)each individual who has an interest in the contract immediately before that time is deemed to have received at that time the payment of an amount under a pension plan equal to the fair market value of the interest immediately before that time,(d)the contract as amended is deemed to be a separate annuity contract issued at that time otherwise than pursuant to or under a superannuation or pension fund or plan, and(e)each individual who has an interest in the separate annuity contract immediately after that time is deemed to have acquired the interest at that time at a cost equal to the fair market value of the interest immediately after that time.
(a)if the rights provided for under the other contract(i)are not materially different from those provided for under the original contract, or(ii)are materially different from those provided for under the original contract only because of an enhancement of benefits that can reasonably be considered to have been provided solely in connection with the demutualization (as defined by subsection 139.1(1)) of an insurance corporation that is considered for the purposes of section 139.1 to have been a party to the original contract,the other contract is deemed to be the same contract as, and a continuation of, the original contract; and(b)in any other case, each individual who has an interest in the original contract immediately before that time is deemed to have received at that time the payment of an amount under a pension plan equal to the fair market value of the interest immediately before that time.
(i)are not materially different from those provided for under the original contract, or(ii)are materially different from those provided for under the original contract only because of an enhancement of benefits that can reasonably be considered to have been provided solely in connection with the demutualization (as defined by subsection 139.1(1)) of an insurance corporation that is considered for the purposes of section 139.1 to have been a party to the original contract,
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]1998, c. 19, s. 1762000, c. 19, s. 432007, c. 29, s. 212021, c. 23, s. 37
147.5(1)The following definitions apply in this section.administratoradministrator, of a pooled pension plan, means(a)a corporation resident in Canada that is responsible for the administration of the plan and that is authorized under thePooled Registered Pension Plans Actor a similar law of a province to act as an administrator for one or more pooled pension plans; or(b)an entity designated in respect of the plan under section 21 of thePooled Registered Pension Plans Actor any provision of a law of a province that is similar to that section. (administrateur)designated pooled pension plandesignated pooled pension plan, for a calendar year, means a pooled pension plan that, at any time in the year (other than the year in which the plan became registered as a PRPP), meets any of the following conditions:(a)the plan has fewer than 10 participating employers;(b)the fair market value of the property held in connection with the accounts of all members of the plan employed by a particular participating employer exceeds 50% of the fair market value of the property held in connection with the plan;(c)more than 50% of the members of the plan are employed by a particular participating employer; or(d)it is reasonable to conclude that the participation in the plan of one or more participating employers occurs primarily to avoid the application of any of paragraphs (a) to (c). (régime de pension collectif désigné)exempt earned incomeexempt earned income, of a taxpayer for a taxation year, means the total of all amounts each of which is an amount that is(a)not included in the taxpayer’s earned income (as defined in subsection 146(1)) for the year and that would be so included but for paragraph 81(1)(a) as it applies with respect to theIndian Act; and(b)reported by the taxpayer in prescribed form filed with the Minister by the taxpayer’s filing-due date for the year, or such later date as is acceptable to the Minister, provided that the later date is within three calendar years following the end of the year. (revenu gagné exonéré)exempt-income contribution amountexempt-income contribution amount, of a taxpayer for a taxation year, means the total of(a)all amounts each of which is a contribution to a PRPP made by the taxpayer for the year that is not deductible in computing the income of the taxpayer because of subsection (32), and(b)the amount, if any, designated under subsection (34) by the taxpayer for the year in prescribed form filed with the Minister by the taxpayer’s filing-due date for the year, or such later date as is acceptable to the Minister, provided that the later date is within three calendar years following the end of the year. (cotisation provenant du revenu exonéré)membermember, of a pooled pension plan, means an individual (other than a trust) who holds an account under the plan. (participant)participating employerparticipating employer, in relation to a pooled pension plan for a calendar year, means an employer that, in the year,(a)makes contributions to the plan in respect of all or a class of its employees or former employees; or(b)remits to the administrator of the plan contributions made by members of the plan under a contract with the administrator in respect of all or a class of its employees. (employeur participant)pooled pension planpooled pension planmeans a plan that is registered under thePooled Registered Pension Plans Actor a similar law of a province. (régime de pension collectif)pooled registered pension planpooled registered pension planorPRPPmeans a pooled pension plan that has been accepted for registration by the Minister for the purposes of this Act, which registration has not been revoked. (régime de pension agréé collectifouRPAC)qualifying annuityqualifying annuity, for an individual, means an annuity (other than an advanced life deferred annuity) that(a)is payable to(i)the individual for the individual’s life, or(ii)the individual for the lives, jointly, of the individual and the individual’s spouse or common-law partner and to the survivor of them for the survivor’s life;(b)is payable beginning no later than the later of(i)the end of the calendar year in which the individual attains 71 years of age, and(ii)the end of the calendar year in which the annuity is acquired;(c)unless the annuity is subsequently commuted into a single payment, is payable(i)at least annually, and(ii)in equal amounts or is not so payable solely because of an adjustment that would, if the annuity were an annuity under a retirement savings plan, in accordance with any of subparagraphs 146(3)(b)(iii) to (v);(d)if the annuity includes a guaranteed period, requires that(i)the period not exceed 15 years, and(ii)in the event of the later of the death of the individual and that of the individual’s spouse or common-law partner during the period, any remaining amounts otherwise payable be commuted into a single payment as soon as practicable after the later death; and(e)does not permit any premiums to be paid, other than the premium paid from the PRPP to acquire the annuity. (rente admissible)qualifying survivorqualifying survivor, in relation to a member of a PRPP, means an individual who, immediately before the death of the member(a)was a spouse or common-law partner of the member; or(b)was a child or grandchild of the member who was financially dependent on the member for support. (survivant admissible)restricted investmentrestricted investment, for a pooled pension plan, means(a)a debt of a member of the plan;(b)a share of, an interest in, or a debt of(i)a corporation, partnership or trust in which a member of the plan has a significant interest, or(ii)a person or partnership that does not deal at arm’s length with the member of the plan or with a person or partnership described in subparagraph (i);(c)an interest (or, for civil law, a right) in, or a right to acquire, a share, interest or debt described in paragraph (a) or (b); or(d)prescribed property. (placement non admissible)single amountsingle amountmeans an amount that is not part of a series of periodic payments. (montant unique)successor membersuccessor membermeans an individual who was the spouse or common-law partner of a member of a PRPP immediately before the death of the member and who acquires, as a consequence of the death, all of the member’s rights in respect of the member’s account under the PRPP. (participant remplaçant)unused non-deductible PRPP roomunused non-deductible PRPP room, of a taxpayer at the end of a taxation year, means the amount determined by the formulaA – BwhereAis the amount of the taxpayer’s unused RRSP deduction room at the end of the year, determined in accordance with subsection (33); andBis the taxpayer’s unused RRSP deduction room at the end of the year. (somme inutilisée non déductible au titre des RPAC)Marginal note:Registration conditions(2)The Minister may accept for registration a pooled pension plan for the purposes of this Act, but shall not accept for registration any plan unless application for registration is made in prescribed manner by the plan administrator and, in the Minister’s opinion, the plan complies with the following conditions:(a)the primary purpose of the plan is to accept and invest contributions in order to provide retirement income to plan members, subject to the limits and other requirements under this Act;(b)a single and separate account is maintained for each member under the member’s Social Insurance Number(i)to which are credited all contributions made to the plan in respect of the member, and any earnings of the plan allocated to the member, and(ii)to which are charged all payments and distributions made in respect of the member;(c)the only benefits provided under the plan in respect of each member are benefits determined solely with reference to, and provided by, the amount in the member’s account;(d)all earnings of the plan are allocated to plan members on a reasonable basis and no less frequently than annually;(e)the arrangement under which property is held in connection with the plan is acceptable to the Minister;(f)no right of a person under the plan is capable of being assigned, charged, anticipated, given as security or surrendered, other than(i)an assignment pursuant to a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the member and the member’s spouse or common-law partner or former spouse or common-law partner, in settlement of rights arising out of, or on a breakdown of, their marriage or common-law partnership, or(ii)an assignment by the legal representative of a deceased individual on the distribution of the individual’s estate;(g)the plan requires that all amounts contributed or allocated to a member’s account vest immediately and indefeasibly for the benefit of the member;(h)the plan permits the payment of an amount to a member if the amount is paid to reduce the amount of tax that would otherwise be payable under Part X.1 by the member;(i)any amount payable from an account of a member after the death of the member is paid as soon as practicable after the death;(j)there is no reason to expect that the plan may become a revocable plan; and(k)any prescribed conditions.Marginal note:Conditions applicable to PRPPs(3)A pooled registered pension plan becomes a revocable plan at any time that(a)a contribution is made to the plan other than an amount(i)paid by a member of the plan,(ii)paid by an employer or former employer of a member of the plan in respect of the member, or(iii)transferred to the plan in accordance with any of subsections (21), 146(16) and (21), 146.3(14) and (14.1), 147(19) and 147.3(1), (4) and (5) to (7);(b)a contribution is made to the plan in respect of a member after the calendar year in which the member attains 71 years of age, other than an amount(i)described in subparagraph (a)(iii), or(ii)if subsection 60.022(1) applies, described in any of subclauses 60(l)(v)(B.2)(II) to (IV) as read in that subsection;(c)a participating employer makes contributions to the plan in a calendar year in respect of a member of the plan in excess of the RRSP dollar limit for the year, except in accordance with a direction by the member;(d)a distribution is made from the plan other than(i)a payment of benefits in accordance with subsection (5), or(ii)a return of contributions(A)if a contribution to the plan has been made as a result of a reasonable error by a member of the plan or a participating employer in relation to the plan and the return of contributions is made to the person who made the contribution no later than December 31 of the year following the calendar year in which the contribution was made,(B)to avoid the revocation of the registration of the plan,(C)to reduce the amount of tax that would otherwise be payable under Part X.1 by a member, or(D)to comply with any requirement under this Act;(e)property is held in connection with the plan that(i)the administrator knew or ought to have known was a restricted investment for the plan, or(ii)in the case of a designated pooled pension plan, is a share or debt of, or an interest in, a participating employer of the plan or any person or partnership that does not deal at arm’s length with a participating employer, or an interest (or, for civil law, a right) in, or a right to acquire, such a share, debt or interest;(f)the value of a member’s right under the plan depends on the value of, or income or capital gains in respect of, property that would be described in paragraph (e) if it were held in connection with the plan;(g)the administrator borrows money or other property for the purposes of the plan; or(h)the plan or the administrator does not comply with a prescribed condition.Marginal note:Non-payment of minimum amount(4)A PRPP becomes a revocable plan at the beginning of a calendar year if the total amount distributed from a member’s account under the PRPP in the calendar year is less than the amount that would be the minimum amount for the calendar year under subsection 8506(5) of theIncome Tax Regulationsif the member’s account were an account under a money purchase provision of a registered pension plan.Marginal note:Permissible benefits(5)The following benefits may be provided under a pooled pension plan:(a)the payment of benefits to a member that would be in accordance with paragraph 8506(1)(e.1) or (e.2) of theIncome Tax Regulationsif the benefits were provided under a money purchase provision of a registered pension plan; and(b)the payment of a single amount from the member’s account.Marginal note:Additional conditions(6)The Minister may, at any time, impose reasonable conditions, in writing, applicable with respect to PRPPs, a class of PRPPs or a particular PRPP.Marginal note:Acceptance of amendments(7)The Minister shall not accept an amendment to a PRPP unless(a)application for the acceptance is made in prescribed manner by the administrator of the PRPP; and(b)the amendment and the PRPP as amended comply with the registration conditions specified in subsection (2).Marginal note:Trust not taxable(8)No tax is payable under this Part by a trust governed by a PRPP on its taxable income for a taxation year, except that, if at any time in the year, it carries on a business, tax is payable under this Part by the trust on the amount that would be its taxable income for the year if it had no income or losses from sources other than the business, and for this purpose,(a)all capital gains and capital losses from the disposition of property held in connection with the business are deemed to be income or losses, as the case may be, from the business; and(b)the trust’s income is to be computed without reference to subsections 104(6), (19) and (21).Marginal note:Obligations of administrator(9)The administrator of a PRPP shall exercise the care, diligence and skill of a reasonably prudent trustee to minimize the possibility that the registration of the PRPP may be revoked other than at the request of the administrator.Marginal note:Employer contributions deductible(10)There may be deducted in computing a taxpayer’s income for a taxation year, the total of all amounts each of which is a contribution made by the taxpayer in the year or within 120 days after the end of the year to a PRPP in respect of the taxpayer’s employees or former employees to the extent that the contribution(a)was made in accordance with the PRPP as registered and in respect of periods before the end of the year; and(b)was not deducted in computing the taxpayer’s income for a preceding taxation year.Marginal note:Member contributions(11)For the purposes of paragraphs 60(j), (j.1) and (l), section 146 (other than subsections (8.3) to (8.7)), paragraphs 146.01(3)(a) and 146.02(3)(a) and Parts X.1 and X.5, a contribution made to a PRPP by a member of a PRPP is deemed to be a premium paid by the member to an RRSP under which the member is the annuitant.Marginal note:Member’s account(12)For the purposes of paragraph 18(1)(u), subparagraph (a)(i) of the definitionexcluded right or interestin subsection 128.1(10), paragraph 146(8.2)(b), subsection 146(8.21), paragraphs 146(16)(a) and (b), subparagraph 146(21)(a)(i), paragraph (b) of the definitionexcluded premiumin subsection 146.01(1), paragraph (c) of the definitionexcluded premiumin subsection 146.02(1), subsections 146.3(14) and 147(19) to (21), section 147.3 and paragraphs 212(1)(j.1) and (m), and of regulations made under subsection 147.1(18), a member’s account under a PRPP is deemed to be a registered retirement savings plan under which the member is the annuitant.Marginal note:Taxable amounts(13)There shall be included in computing the income of a taxpayer for a taxation year(a)if the taxpayer is a member of a PRPP, the total of all amounts each of which is a distribution made in the year from the member’s account under the PRPP, other than an amount that is(i)included in computing the income of another taxpayer for the year under paragraph (b),(ii)described in subsection (22), or(iii)distributed after the death of the member;(b)if the taxpayer is a participating employer in relation to a PRPP, the total of all amounts each of which is a return of contributions that is described in clause (3)(d)(ii)(A) and that is made to the taxpayer in the year.Marginal note:Treatment on death — no successor member(14)If a member of a PRPP dies and there is no successor member in respect of the deceased member’s account under the PRPP, an amount, equal to the amount by which the fair market value of all property held in connection with the account immediately before the death exceeds the total of all amounts distributed from the account that are described in subsection (16), is deemed to have been distributed from the account immediately before the death.Marginal note:Treatment on death — successor member(15)If a member of a PRPP dies and there is a successor member in respect of the deceased member’s account under the PRPP,(a)the account ceases to be an account of the deceased member at the time of the death;(b)the successor member is, after the time of the death, deemed to hold the account as a member of the PRPP; and(c)the successor member is deemed to be a separate member in respect of any other account under the PRPP that the successor member holds.Marginal note:Qualifying survivor(16)If, as a consequence of the death of a member of a PRPP, an amount is distributed in a taxation year from the member’s account under the PRPP to, or on behalf of, a qualifying survivor of the member, the amount shall be included in computing the survivor’s income for the year, except to the extent that it is an amount described in subsection (22).Marginal note:Deemed distribution to qualifying survivor(17)If an amount is distributed at any time from a deceased member’s account under a PRPP to the member’s legal representative and a qualifying survivor of the member is entitled to all or a portion of the amount in full or partial satisfaction of the survivor’s rights as a beneficiary (as defined in subsection 108(1)) under the deceased’s estate, then, for the purposes of subsection (16), the amount or portion of the amount, as the case may be, is deemed to have been distributed at that time from the member’s account to the qualifying survivor (and not to the legal representative) to the extent that it is so designated jointly by the legal representative and the qualifying survivor in prescribed form filed with the Minister.Marginal note:Post-death increase in value(18)There shall be included in computing the income for a taxation year of a taxpayer who is not a qualifying survivor in relation to a member of a PRPP, the total of all amounts each of which is an amount determined by the formulaA – BwhereAis the amount of a distribution made in the year from the member’s account under the PRPP as a consequence of the member’s death to, or on behalf of, the taxpayer, andBis an amount designated by the administrator of the PRPP not exceeding the lesser of(a)the amount of the distribution, and(b)the amount by which the fair market value of all property held in connection with the account immediately before the death exceeds the total of all amounts each of which is(i)the value of B in respect of any prior distribution made from the account, or(ii)an amount included under subsection (16) in computing the income of a qualifying survivor in relation to the member.Marginal note:Post-death decrease in value(19)There may be deducted in computing the income of a member of a PRPP for the taxation year in which the member dies, an amount not exceeding the amount determined, after all amounts payable from the member’s account under the PRPP have been distributed, by the formulaA – BwhereAis the total of all amounts each of which is an amount in respect of the account(a)included in the member’s income under subsection (13) because of the application of subsection (14),(b)included in the income of another taxpayer under subsection (16) or (18), or(c)transferred in accordance with subsection (21) in circumstances described in subparagraph (21)(b)(iii); andBis the total of all distributions made from the account after the member’s death.Marginal note:Subsection (19) not applicable(20)Except where the Minister has waived in writing the application of this subsection with respect to all or any portion of the amount determined in subsection (19) in respect of a member’s account under a PRPP, that subsection does not apply if the last distribution from the account was made after the end of the calendar year following the year in which the member died.Marginal note:Transfer of amounts(21)An amount is transferred from a member’s account under a PRPP in accordance with this subsection if the amount(a)is a single amount;(b)is transferred on behalf of an individual who(i)is the member,(ii)is a spouse or common-law partner or former spouse or common-law partner of the member and who is entitled to the amount under a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the member and the individual, in settlement of rights arising out of, or on a breakdown of, their marriage or common-law partnership, or(iii)is entitled to the amount as a consequence of the death of the member and was a spouse or common-law partner of the member immediately before the death; and(c)is transferred directly to(i)the individual’s account under the PRPP,(ii)another PRPP in respect of the individual,(iii)a registered pension plan for the benefit of the individual,(iv)a registered retirement savings plan or registered retirement income fund under which the individual is the annuitant,(v)a licensed annuities provider to acquire a qualifying annuity for the individual, or(vi)a licensed annuities provider to acquire an advanced life deferred annuity for the benefit of the member.Marginal note:Taxation of transfers(22)If subsection (21) applies to an amount transferred from a member’s account under a PRPP on behalf of an individual,(a)the amount shall not, by reason only of that transfer, be included in computing the income of the individual; and(b)no deduction may be made in respect of the amount in computing the income of any taxpayer.Marginal note:Taxation of qualifying annuity(23)If an amount is transferred in accordance with subsection (21) to acquire a qualifying annuity, there shall be included — under this section and not under any other provision of this Act — in computing an individual’s income for a taxation year any amount received by the individual during the year out of or under the annuity or as proceeds from a disposition in respect of the annuity.Marginal note:Notice of intent(24)The Minister may give notice (in subsections (25) and (26) referred to as a “notice of intent”) to an administrator of a PRPP in writing that the Minister intends to revoke the registration of the plan as a PRPP if(a)the plan does not comply with the conditions for registration in subsection (2);(b)the plan is not administered in accordance with the terms of the plan as registered;(c)the plan becomes a revocable plan;(d)a condition imposed under subsection (6) that applies with respect to the plan is not complied with; or(e)registration of the plan under thePooled Registered Pension Plans Actor a similar law of a province is refused or revoked.Marginal note:Date of revocation(25)The notice of intent shall specify the date on which revocation of a PRPP is to be effective, which date shall not be earlier than the earliest date on which one of the events described in subsection (24) occurs.Marginal note:Notice of revocation(26)At any time after 30 days after the day on which the notice of intent is mailed to an administrator of a PRPP, the Minister may give notice (in this subsection and in subsection (27) referred to as a “notice of revocation”) in writing to the administrator that the registration of the PRPP is revoked as of the date specified in the notice of revocation and that date may not be earlier than the date specified in the notice of intent.Marginal note:Revocation of registration(27)If the Minister gives a notice of revocation to the administrator of a PRPP, the registration of the PRPP is revoked as of the date specified in the notice of revocation, unless the Federal Court of Appeal or a judge of that Court, on application made at any time before the determination of an appeal pursuant to subsection 172(3), orders otherwise.Marginal note:Voluntary revocation(28)If the administrator of a PRPP so requests in writing, the Minister may give notice in writing to the administrator that the registration of the PRPP is revoked as of a specified date and that date may not be earlier than the date specified in the administrator’s request.Marginal note:Single employer(29)For the purposes of the definitiondesignated pooled pension planin subsection (1), all employers that are related to each other are deemed to be a single employer and all the structural units of a trade union, including each local, branch, national and international unit, are deemed to be a single employer.Marginal note:Significant interest(30)For the purposes of the definitionrestricted investmentin subsection (1), a member of a pooled pension plan has a significant interest in a corporation, trust or partnership at any time if, at that time,(a)in the case of a corporation, the member is a specified shareholder of the corporation; and(b)in the case of a partnership or trust,(i)the member is a specified unitholder of the partnership or the trust, as the case may be, or(ii)the total fair market value of the member’s interests in the partnership or the trust, as the case may be, together with all interests in the partnership or the trust held by persons or partnerships with whom the member does not deal at arm’s length or is affiliated, is 10% or more of the fair market value of all interests in the partnership or the trust.Marginal note:Contributions from exempt income(31)Contributions may be made to a PRPP in respect of a member of the PRPP as if the member’s earned income (as defined in subsection 146(1)) for a taxation year included the member’s exempt earned income for the year.Marginal note:Non-deductible contributions(32)A contribution made by a member of a PRPP to the member’s account under the PRPP out of or from the member’s exempt earned income may not be deducted in computing the income of the member for any taxation year.Marginal note:Contribution deemed not paid(32.1)Where a member of a PRPP or a participating employer in relation to the PRPP has, at any time in a taxation year, received a distribution from the member’s account under the PRPP that is a return of a contribution described in clause 147.5(3)(d)(ii)(A) or (B), the contribution is deemed not to have been a contribution made by the member or the participating employer, as the case may be, to the PRPP to the extent that the contribution is not deducted in computing the taxpayer’s income for the year or a preceding taxation year.Marginal note:Exempt contributions not over-contributions(33)For the purposes of Part X.1 as it applies because of subsection (11) in respect of contributions made to a PRPP,(a)an individual’s earned income (as defined in subsection 146(1)) for any taxation year after 2012 includes the individual’s exempt earned income for that year;(b)an individual’s exempt-income contribution amount for any taxation year is deemed to have been deducted by the individual under subsection 146(5) in computing the individual’s income for that year; and(c)the description of D in paragraph (b) of the definitionunused RRSP deduction roomin subsection 146(1) is to be read without reference to subparagraph (iv).Marginal note:Designation of exempt-income contribution amount(34)A taxpayer may designate an amount as the taxpayer’s exempt-income contribution amount for a taxation year if the amount designated does not exceed the lesser of(a)the taxpayer’s unused non-deductible PRPP room at the end of the preceding taxation year, and(b)the total of the taxpayer’s contributions as a member to a PRPP for the year (other than contributions to which subsection (32) applies).Marginal note:Regulations — other(35)The Governor in Council may make regulations(a)prescribing conditions applicable to administrators;(b)requiring administrators to file information returns respecting pooled pension plans;(c)enabling the Minister to require any person to provide the Minister with information for the purposes and provisions of this Act relating to PRPPs; and(d)generally to carry out the purposes and provisions of this Act relating to PRPPs.
(a)a corporation resident in Canada that is responsible for the administration of the plan and that is authorized under thePooled Registered Pension Plans Actor a similar law of a province to act as an administrator for one or more pooled pension plans; or(b)an entity designated in respect of the plan under section 21 of thePooled Registered Pension Plans Actor any provision of a law of a province that is similar to that section. (administrateur)
(a)the plan has fewer than 10 participating employers;(b)the fair market value of the property held in connection with the accounts of all members of the plan employed by a particular participating employer exceeds 50% of the fair market value of the property held in connection with the plan;(c)more than 50% of the members of the plan are employed by a particular participating employer; or(d)it is reasonable to conclude that the participation in the plan of one or more participating employers occurs primarily to avoid the application of any of paragraphs (a) to (c). (régime de pension collectif désigné)
(a)not included in the taxpayer’s earned income (as defined in subsection 146(1)) for the year and that would be so included but for paragraph 81(1)(a) as it applies with respect to theIndian Act; and(b)reported by the taxpayer in prescribed form filed with the Minister by the taxpayer’s filing-due date for the year, or such later date as is acceptable to the Minister, provided that the later date is within three calendar years following the end of the year. (revenu gagné exonéré)
(a)all amounts each of which is a contribution to a PRPP made by the taxpayer for the year that is not deductible in computing the income of the taxpayer because of subsection (32), and(b)the amount, if any, designated under subsection (34) by the taxpayer for the year in prescribed form filed with the Minister by the taxpayer’s filing-due date for the year, or such later date as is acceptable to the Minister, provided that the later date is within three calendar years following the end of the year. (cotisation provenant du revenu exonéré)
(a)makes contributions to the plan in respect of all or a class of its employees or former employees; or(b)remits to the administrator of the plan contributions made by members of the plan under a contract with the administrator in respect of all or a class of its employees. (employeur participant)
(a)is payable to(i)the individual for the individual’s life, or(ii)the individual for the lives, jointly, of the individual and the individual’s spouse or common-law partner and to the survivor of them for the survivor’s life;(b)is payable beginning no later than the later of(i)the end of the calendar year in which the individual attains 71 years of age, and(ii)the end of the calendar year in which the annuity is acquired;(c)unless the annuity is subsequently commuted into a single payment, is payable(i)at least annually, and(ii)in equal amounts or is not so payable solely because of an adjustment that would, if the annuity were an annuity under a retirement savings plan, in accordance with any of subparagraphs 146(3)(b)(iii) to (v);(d)if the annuity includes a guaranteed period, requires that(i)the period not exceed 15 years, and(ii)in the event of the later of the death of the individual and that of the individual’s spouse or common-law partner during the period, any remaining amounts otherwise payable be commuted into a single payment as soon as practicable after the later death; and(e)does not permit any premiums to be paid, other than the premium paid from the PRPP to acquire the annuity. (rente admissible)
(i)the individual for the individual’s life, or(ii)the individual for the lives, jointly, of the individual and the individual’s spouse or common-law partner and to the survivor of them for the survivor’s life;
(i)the end of the calendar year in which the individual attains 71 years of age, and(ii)the end of the calendar year in which the annuity is acquired;
(i)at least annually, and(ii)in equal amounts or is not so payable solely because of an adjustment that would, if the annuity were an annuity under a retirement savings plan, in accordance with any of subparagraphs 146(3)(b)(iii) to (v);
(i)the period not exceed 15 years, and(ii)in the event of the later of the death of the individual and that of the individual’s spouse or common-law partner during the period, any remaining amounts otherwise payable be commuted into a single payment as soon as practicable after the later death; and
(a)was a spouse or common-law partner of the member; or(b)was a child or grandchild of the member who was financially dependent on the member for support. (survivant admissible)
(a)a debt of a member of the plan;(b)a share of, an interest in, or a debt of(i)a corporation, partnership or trust in which a member of the plan has a significant interest, or(ii)a person or partnership that does not deal at arm’s length with the member of the plan or with a person or partnership described in subparagraph (i);(c)an interest (or, for civil law, a right) in, or a right to acquire, a share, interest or debt described in paragraph (a) or (b); or(d)prescribed property. (placement non admissible)
(i)a corporation, partnership or trust in which a member of the plan has a significant interest, or(ii)a person or partnership that does not deal at arm’s length with the member of the plan or with a person or partnership described in subparagraph (i);
(a)the primary purpose of the plan is to accept and invest contributions in order to provide retirement income to plan members, subject to the limits and other requirements under this Act;(b)a single and separate account is maintained for each member under the member’s Social Insurance Number(i)to which are credited all contributions made to the plan in respect of the member, and any earnings of the plan allocated to the member, and(ii)to which are charged all payments and distributions made in respect of the member;(c)the only benefits provided under the plan in respect of each member are benefits determined solely with reference to, and provided by, the amount in the member’s account;(d)all earnings of the plan are allocated to plan members on a reasonable basis and no less frequently than annually;(e)the arrangement under which property is held in connection with the plan is acceptable to the Minister;(f)no right of a person under the plan is capable of being assigned, charged, anticipated, given as security or surrendered, other than(i)an assignment pursuant to a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the member and the member’s spouse or common-law partner or former spouse or common-law partner, in settlement of rights arising out of, or on a breakdown of, their marriage or common-law partnership, or(ii)an assignment by the legal representative of a deceased individual on the distribution of the individual’s estate;(g)the plan requires that all amounts contributed or allocated to a member’s account vest immediately and indefeasibly for the benefit of the member;(h)the plan permits the payment of an amount to a member if the amount is paid to reduce the amount of tax that would otherwise be payable under Part X.1 by the member;(i)any amount payable from an account of a member after the death of the member is paid as soon as practicable after the death;(j)there is no reason to expect that the plan may become a revocable plan; and(k)any prescribed conditions.
(i)to which are credited all contributions made to the plan in respect of the member, and any earnings of the plan allocated to the member, and(ii)to which are charged all payments and distributions made in respect of the member;
(i)an assignment pursuant to a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the member and the member’s spouse or common-law partner or former spouse or common-law partner, in settlement of rights arising out of, or on a breakdown of, their marriage or common-law partnership, or(ii)an assignment by the legal representative of a deceased individual on the distribution of the individual’s estate;
(a)a contribution is made to the plan other than an amount(i)paid by a member of the plan,(ii)paid by an employer or former employer of a member of the plan in respect of the member, or(iii)transferred to the plan in accordance with any of subsections (21), 146(16) and (21), 146.3(14) and (14.1), 147(19) and 147.3(1), (4) and (5) to (7);(b)a contribution is made to the plan in respect of a member after the calendar year in which the member attains 71 years of age, other than an amount(i)described in subparagraph (a)(iii), or(ii)if subsection 60.022(1) applies, described in any of subclauses 60(l)(v)(B.2)(II) to (IV) as read in that subsection;(c)a participating employer makes contributions to the plan in a calendar year in respect of a member of the plan in excess of the RRSP dollar limit for the year, except in accordance with a direction by the member;(d)a distribution is made from the plan other than(i)a payment of benefits in accordance with subsection (5), or(ii)a return of contributions(A)if a contribution to the plan has been made as a result of a reasonable error by a member of the plan or a participating employer in relation to the plan and the return of contributions is made to the person who made the contribution no later than December 31 of the year following the calendar year in which the contribution was made,(B)to avoid the revocation of the registration of the plan,(C)to reduce the amount of tax that would otherwise be payable under Part X.1 by a member, or(D)to comply with any requirement under this Act;(e)property is held in connection with the plan that(i)the administrator knew or ought to have known was a restricted investment for the plan, or(ii)in the case of a designated pooled pension plan, is a share or debt of, or an interest in, a participating employer of the plan or any person or partnership that does not deal at arm’s length with a participating employer, or an interest (or, for civil law, a right) in, or a right to acquire, such a share, debt or interest;(f)the value of a member’s right under the plan depends on the value of, or income or capital gains in respect of, property that would be described in paragraph (e) if it were held in connection with the plan;(g)the administrator borrows money or other property for the purposes of the plan; or(h)the plan or the administrator does not comply with a prescribed condition.
(i)paid by a member of the plan,(ii)paid by an employer or former employer of a member of the plan in respect of the member, or(iii)transferred to the plan in accordance with any of subsections (21), 146(16) and (21), 146.3(14) and (14.1), 147(19) and 147.3(1), (4) and (5) to (7);
(i)described in subparagraph (a)(iii), or(ii)if subsection 60.022(1) applies, described in any of subclauses 60(l)(v)(B.2)(II) to (IV) as read in that subsection;
(i)a payment of benefits in accordance with subsection (5), or(ii)a return of contributions(A)if a contribution to the plan has been made as a result of a reasonable error by a member of the plan or a participating employer in relation to the plan and the return of contributions is made to the person who made the contribution no later than December 31 of the year following the calendar year in which the contribution was made,(B)to avoid the revocation of the registration of the plan,(C)to reduce the amount of tax that would otherwise be payable under Part X.1 by a member, or(D)to comply with any requirement under this Act;
(A)if a contribution to the plan has been made as a result of a reasonable error by a member of the plan or a participating employer in relation to the plan and the return of contributions is made to the person who made the contribution no later than December 31 of the year following the calendar year in which the contribution was made,(B)to avoid the revocation of the registration of the plan,(C)to reduce the amount of tax that would otherwise be payable under Part X.1 by a member, or(D)to comply with any requirement under this Act;
(i)the administrator knew or ought to have known was a restricted investment for the plan, or(ii)in the case of a designated pooled pension plan, is a share or debt of, or an interest in, a participating employer of the plan or any person or partnership that does not deal at arm’s length with a participating employer, or an interest (or, for civil law, a right) in, or a right to acquire, such a share, debt or interest;
(a)the payment of benefits to a member that would be in accordance with paragraph 8506(1)(e.1) or (e.2) of theIncome Tax Regulationsif the benefits were provided under a money purchase provision of a registered pension plan; and(b)the payment of a single amount from the member’s account.
(a)application for the acceptance is made in prescribed manner by the administrator of the PRPP; and(b)the amendment and the PRPP as amended comply with the registration conditions specified in subsection (2).
(a)all capital gains and capital losses from the disposition of property held in connection with the business are deemed to be income or losses, as the case may be, from the business; and(b)the trust’s income is to be computed without reference to subsections 104(6), (19) and (21).
(a)was made in accordance with the PRPP as registered and in respect of periods before the end of the year; and(b)was not deducted in computing the taxpayer’s income for a preceding taxation year.
(a)if the taxpayer is a member of a PRPP, the total of all amounts each of which is a distribution made in the year from the member’s account under the PRPP, other than an amount that is(i)included in computing the income of another taxpayer for the year under paragraph (b),(ii)described in subsection (22), or(iii)distributed after the death of the member;(b)if the taxpayer is a participating employer in relation to a PRPP, the total of all amounts each of which is a return of contributions that is described in clause (3)(d)(ii)(A) and that is made to the taxpayer in the year.
(i)included in computing the income of another taxpayer for the year under paragraph (b),(ii)described in subsection (22), or(iii)distributed after the death of the member;
(a)the account ceases to be an account of the deceased member at the time of the death;(b)the successor member is, after the time of the death, deemed to hold the account as a member of the PRPP; and(c)the successor member is deemed to be a separate member in respect of any other account under the PRPP that the successor member holds.
(a)the amount of the distribution, and(b)the amount by which the fair market value of all property held in connection with the account immediately before the death exceeds the total of all amounts each of which is(i)the value of B in respect of any prior distribution made from the account, or(ii)an amount included under subsection (16) in computing the income of a qualifying survivor in relation to the member.
(i)the value of B in respect of any prior distribution made from the account, or(ii)an amount included under subsection (16) in computing the income of a qualifying survivor in relation to the member.
(a)included in the member’s income under subsection (13) because of the application of subsection (14),(b)included in the income of another taxpayer under subsection (16) or (18), or(c)transferred in accordance with subsection (21) in circumstances described in subparagraph (21)(b)(iii); and
(a)is a single amount;(b)is transferred on behalf of an individual who(i)is the member,(ii)is a spouse or common-law partner or former spouse or common-law partner of the member and who is entitled to the amount under a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the member and the individual, in settlement of rights arising out of, or on a breakdown of, their marriage or common-law partnership, or(iii)is entitled to the amount as a consequence of the death of the member and was a spouse or common-law partner of the member immediately before the death; and(c)is transferred directly to(i)the individual’s account under the PRPP,(ii)another PRPP in respect of the individual,(iii)a registered pension plan for the benefit of the individual,(iv)a registered retirement savings plan or registered retirement income fund under which the individual is the annuitant,(v)a licensed annuities provider to acquire a qualifying annuity for the individual, or(vi)a licensed annuities provider to acquire an advanced life deferred annuity for the benefit of the member.
(i)is the member,(ii)is a spouse or common-law partner or former spouse or common-law partner of the member and who is entitled to the amount under a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the member and the individual, in settlement of rights arising out of, or on a breakdown of, their marriage or common-law partnership, or(iii)is entitled to the amount as a consequence of the death of the member and was a spouse or common-law partner of the member immediately before the death; and
(i)the individual’s account under the PRPP,(ii)another PRPP in respect of the individual,(iii)a registered pension plan for the benefit of the individual,(iv)a registered retirement savings plan or registered retirement income fund under which the individual is the annuitant,(v)a licensed annuities provider to acquire a qualifying annuity for the individual, or(vi)a licensed annuities provider to acquire an advanced life deferred annuity for the benefit of the member.
(a)the amount shall not, by reason only of that transfer, be included in computing the income of the individual; and(b)no deduction may be made in respect of the amount in computing the income of any taxpayer.
(a)the plan does not comply with the conditions for registration in subsection (2);(b)the plan is not administered in accordance with the terms of the plan as registered;(c)the plan becomes a revocable plan;(d)a condition imposed under subsection (6) that applies with respect to the plan is not complied with; or(e)registration of the plan under thePooled Registered Pension Plans Actor a similar law of a province is refused or revoked.
(a)in the case of a corporation, the member is a specified shareholder of the corporation; and(b)in the case of a partnership or trust,(i)the member is a specified unitholder of the partnership or the trust, as the case may be, or(ii)the total fair market value of the member’s interests in the partnership or the trust, as the case may be, together with all interests in the partnership or the trust held by persons or partnerships with whom the member does not deal at arm’s length or is affiliated, is 10% or more of the fair market value of all interests in the partnership or the trust.
(i)the member is a specified unitholder of the partnership or the trust, as the case may be, or(ii)the total fair market value of the member’s interests in the partnership or the trust, as the case may be, together with all interests in the partnership or the trust held by persons or partnerships with whom the member does not deal at arm’s length or is affiliated, is 10% or more of the fair market value of all interests in the partnership or the trust.
(a)an individual’s earned income (as defined in subsection 146(1)) for any taxation year after 2012 includes the individual’s exempt earned income for that year;(b)an individual’s exempt-income contribution amount for any taxation year is deemed to have been deducted by the individual under subsection 146(5) in computing the individual’s income for that year; and(c)the description of D in paragraph (b) of the definitionunused RRSP deduction roomin subsection 146(1) is to be read without reference to subparagraph (iv).
(a)the taxpayer’s unused non-deductible PRPP room at the end of the preceding taxation year, and(b)the total of the taxpayer’s contributions as a member to a PRPP for the year (other than contributions to which subsection (32) applies).
(a)prescribing conditions applicable to administrators;(b)requiring administrators to file information returns respecting pooled pension plans;(c)enabling the Minister to require any person to provide the Minister with information for the purposes and provisions of this Act relating to PRPPs; and(d)generally to carry out the purposes and provisions of this Act relating to PRPPs.
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]2012, c. 31, s. 362015, c. 36, s. 172017, c. 33, s. 602021, c. 23, s. 38
148(1)There shall be included in computing the income for a taxation year of a policyholder in respect of the disposition of an interest in a life insurance policy, other than a policy that is or is issued pursuant to(a)a registered pension fund or plan,(b)a registered retirement savings plan,(b.1)a registered retirement income fund,(b.2)a TFSA,(b.3)a pooled registered pension plan,(b.4)a FHSA,(c)an income-averaging annuity contract,(d)a deferred profit sharing plan, or(e)an annuity contract if(i)the payment for the annuity contract was deductible under paragraph 60(l) in computing the policyholder’s income,(i.1)the annuity contract is a qualifying trust annuity with respect to a taxpayer and the amount paid to acquire it was deductible under paragraph 60(l) in computing the taxpayer’s income, or(ii)the policyholder acquired the annuity contract in circumstances to which subsection 146(21) applied,the amount, if any, by which the proceeds of the disposition of the policyholder’s interest in the policy that the policyholder, beneficiary or assignee, as the case may be, became entitled to receive in the year exceeds the adjusted cost basis to the policyholder of that interest immediately before the disposition.Marginal note:Amount included in computing taxpayer’s income(1.1)There shall be included in computing the income for a taxation year of a taxpayer in respect of a disposition of an interest in a life insurance policy described in paragraph (e) of the definitiondispositionin subsection 148(9) the amount, if any, by which the amount of a payment described in paragraph (e) of that definition that the taxpayer became entitled to receive in the year exceeds the amount that would be the taxpayer’s adjusted cost basis of the taxpayer’s interest in the policy immediately before the disposition if, for the purposes of the definitionadjusted cost basisin subsection 148(9), the taxpayer were, in respect of that interest in the policy, the policyholder.Marginal note:Deemed proceeds of disposition(2)For the purposes of subsections 148(1) and 20(20) and the definitionadjusted cost basisin subsection 148(9)(a)where at any time a policyholder becomes entitled to receive under a life insurance policy a particular amount as, on account of, in lieu of payment of or in satisfaction of, a policy dividend, the policyholder shall be deemed(i)to have disposed of an interest in the policy at that time, and(ii)to have become entitled to receive proceeds of the disposition equal to the amount, if any, by which(A)the particular amountexceeds(B)the part of the particular amount applied immediately after that time to pay a premium under the policy or to repay a policy loan under the policy, as provided for under the terms and conditions of the policy;(b)where in a taxation year a holder of an interest in, or a person whose life is insured or who is the annuitant under, a life insurance policy (other than an annuity contract or an exempt policy) last acquired after December 1, 1982 or an annuity contract (other than a life annuity contract, as defined by regulation, entered into before November 13, 1981 or a prescribed annuity contract) dies, the policyholder shall be deemed to have disposed of the policyholder’s interest in the policy or the contract, as the case may be, immediately before the death;(c)where, as a consequence of a death, a disposition of an interest in a life insurance policy is deemed to have occurred under paragraph 148(2)(b), the policyholder immediately after the death shall be deemed to have acquired the interest at a cost equal to the accumulating fund in respect thereof, as determined in prescribed manner, immediately after the death;(d)where at any time a life insurance policy last acquired after December 1, 1982, or a life insurance policy to which subsection 12.2(9) of theIncome Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, applies by virtue of paragraph 12.2(9)(b) of that Act, ceases to be an exempt policy (otherwise than as a consequence of the death of an individual whose life is insured under the policy or at a time when that individual is totally and permanently disabled), the policyholder shall be deemed to have disposed of the policyholder’s interest in the policy at that time for proceeds of disposition equal to the accumulating fund with respect to the interest, as determined in prescribed manner, at that time and to have reacquired the interest immediately after that time at a cost equal to those proceeds; and(e)a policyholder with an interest in a life insurance policy, issued after 2016, that gives rise to an entitlement (of the policyholder, beneficiary or assignee, as the case may be) to receive all or a portion of an excess described in subparagraph (iv) is deemed, at a particular time, to dispose of a part of the interest and to be entitled to receive proceeds of the disposition equal to that excess or portion, as the case may be, if(i)the policy is an exempt policy,(ii)abenefit on death(as defined in subsection 1401(3) of theIncome Tax Regulations) under acoverage(as defined in section 310 of theIncome Tax Regulationsfor the purposes of section 306 of theIncome Tax Regulations) under the policy is paid at the particular time,(iii)the payment results in the termination of the coverage but not the policy, and(iv)the amount of thefund value benefit(as defined in subsection 1401(3) of theIncome Tax Regulations) paid at the particular time in respect of the coverage exceeds the amount(A)in the case where there is nopolicy anniversary(as defined in section 310 of theIncome Tax Regulations) before the date of death of the individual whose life is insured under the coverage, that would be determined — on the policy anniversary that is on or that first follows that date of death and as though the coverage were not terminated — in respect of the coverage under subclause (A)(I) of the description of B in subparagraph 306(4)(a)(iii) of theIncome Tax Regulations, and(B)in any other case, that is determined — on the last policy anniversary before the date of the death of the individual whose life is insured under the coverage — in respect of the coverage under subclause (A)(I) of the description of B in subparagraph 306(4)(a)(iii) of theIncome Tax Regulationsas it applies for the purpose of subparagraph 306(1)(b)(ii) of theIncome Tax Regulations.Marginal note:Special rules for certain policies(3)For the purposes of this section, where all or any part of an insurer’s reserves for a life insurance policy vary in amount depending on the fair market value of a specified group of properties (in this subsection referred to as a “segregated fund”),(a)in computing the adjusted cost basis of the policy,(i)an amount paid by the policyholder or on the policyholder’s behalf as or on account of premiums under the policy or to acquire an interest in the policy shall, to the extent that the amount was used by the insurer to acquire property for the purposes of the segregated fund, be deemed not to have been so paid, and(ii)any transfer of property by the insurer from the segregated fund that resulted in an increase in the portion of its reserves for the policy that do not vary with the fair market value of the segregated fund shall be deemed to have been a premium paid under the policy by the policyholder; and(b)the proceeds of the disposition of an interest in the policy shall be deemed not to include the portion thereof, if any, payable out of the segregated fund.Marginal note:Partial surrender — ACB prorated(4)If a taxpayer disposes (other than because of paragraph (2)(a) or as described in paragraph (b) of the definitiondispositionin subsection (9)) of a part of the taxpayer’s interest in a life insurance policy (other than an annuity contract) last acquired after December 1, 1982 or an annuity contract, the adjusted cost basis to the taxpayer, immediately before the disposition, of the part is the amount determined by the formulaA × B/CwhereAis the adjusted cost basis to the taxpayer of the taxpayer’s interest immediately before the disposition,Bis the proceeds of the disposition, andCis(a)if the policy is a policy (other than an annuity contract) issued after 2016, the amount determined by the formulaD – EwhereDis the interest’s cash surrender value immediately before the disposition, andEis the total of all amounts each of which is an amount payable, immediately before the disposition, by the taxpayer in respect of a policy loan in respect of the policy, and(b)in any other case, the accumulating fund with respect to the taxpayer’s interest, as determined in prescribed manner, immediately before the disposition.Marginal note:Repayment of policy loan on partial surrender(4.01)For the purposes of the definitionadjusted cost basisin subsection (9) and paragraph 60(s), a particular amount is deemed to be a repayment made immediately before a particular time by a taxpayer in respect of a policy loan in respect of a life insurance policy if(a)the policy is issued after 2016;(b)the taxpayer disposes of a part of the taxpayer’s interest in the policy at the particular time;(c)paragraph (a) of the definitionproceeds of the dispositionin subsection (9) applies to determine the proceeds of the disposition of the interest;(d)the particular amount is not(i)otherwise a repayment by the taxpayer in respect of the policy loan, and(ii)described in subparagraph (i) of the description of C in paragraph (a) of the definitionproceeds of the dispositionin subsection (9); and(e)the amount payable by the taxpayer in respect of the policy loan is reduced by the particular amount as a consequence of the disposition.Marginal note:10/8 policy surrender(5)If a policyholder has after March 20, 2013 and before April 2014 disposed of an interest in a 10/8 policy because of a partial or complete surrender of the policy, the policyholder may deduct in computing their income for the taxation year in which the disposition occurs an amount that does not exceed the least of(a)the portion of an amount, included under subsection (1) in computing their income for the year in respect of the disposition, that is attributable to an investment account described in paragraph (b) of the definition10/8 policyin subsection 248(1) in respect of the policy,(b)the total of all amounts each of which is an amount, to the extent that the amount has not otherwise been included in determining an amount under this paragraph, of a payment made after March 20, 2013 and before April 2014 that reduces the amount outstanding of a borrowing or policy loan, as the case may be, described in paragraph (a) of the definition10/8 policyin subsection 248(1) in respect of the policy, and(c)the total of all amounts each of which is an amount, to the extent that the amount has not otherwise been included in determining an amount under this paragraph, that the policyholder is entitled to receive as a result of the disposition and that is paid after March 20, 2013 and before April 2014 out of an investment account described in paragraph (b) of the definition10/8 policyin subsection 248(1) in respect of the policy.Marginal note:Proceeds receivable as annuity(6)Where, under the terms of a life insurance policy (other than an annuity contract) last acquired before December 2, 1982, a policyholder became entitled to receive from the insurer at any time before the death of the person whose life was insured thereunder, all the proceeds (other than policy dividends) payable at that time under the policy in the form of an annuity contract or annuity payments,(a)the payments shall be regarded as annuity payments made under an annuity contract;(b)the purchase price of the annuity contract shall be deemed to be the adjusted cost basis of the policy to the policyholder immediately before the first payment under that contract became payable; and(c)the annuity contract or annuity payments shall be deemed not to be proceeds of the disposition of an interest in the policy.Marginal note:Disposition at non-arm’s length and similar cases(7)If an interest of a policyholder in a life insurance policy is, at any time (referred to in this subsection as thedisposition time), disposed of (other than a disposition under paragraph (2)(b)) by way of a gift, by distribution from a corporation or by operation of law only to any person, or in any manner whatever to any person with whom the policyholder was not dealing at arm’s length,(a)the policyholder is deemed to become entitled to receive, at the disposition time, proceeds of the disposition equal to the greatest of(i)the value of the interest at the disposition time,(ii)an amount equal to(A)if the disposition time is before March 22, 2016, nil, and(B)if the disposition time is after March 21, 2016, the fair market value at the disposition time of the consideration, if any, given for the interest, and(iii)an amount equal to(A)if the disposition time is before March 22, 2016, nil, and(B)if the disposition time is after March 21, 2016, the adjusted cost basis to the policyholder of the interest immediately before the disposition time;(b)the person that acquires the interest because of the disposition is deemed to acquire it, at the disposition time, at a cost equal to the amount determined under paragraph (a) in respect of the disposition;(c)in computing the paid-up capital in respect of each class of shares of the capital stock of a corporation at any time at or after the disposition time there shall be deducted the amount determined by the formula(A − B × C/D) × E/AwhereAis the increase, if any, as a result of the disposition, in the paid-up capital in respect of all the shares of the capital stock of the corporation,Bis the amount determined under paragraph (a) in respect of the disposition,Cis(i)if consideration is given for the interest, the fair market value at the disposition time of consideration that is shares of the capital stock of the corporation given for the interest, and(ii)if no consideration is given for the interest, 1,Dis(i)if consideration is given for the interest, the fair market value at the disposition time of the consideration given for the interest, and(ii)if no consideration is given for the interest, 1, andEis the increase, if any, as a result of the disposition, in the paid-up capital in respect of the class of shares, computed without reference to this paragraph as it applies to the disposition;(d)any contribution of capital to a corporation or partnership in connection with the disposition is deemed, to the extent that it exceeds the amount determined under subparagraph (a)(i) in respect of the disposition, not to result in a contribution of capital for the purpose of applying paragraphs 53(1)(c) and (e) at or after the disposition time;(e)any contributed surplus of a corporation that arose in connection with the disposition is deemed, to the extent that it exceeds the amount determined under subparagraph (a)(i) in respect of the disposition, not to be contributed surplus for the purpose of applying subsection 84(1) at or after the disposition time; and(f)if the disposition time is before March 22, 2016,(i)subparagraphs (ii) and (iii) and paragraphs (c) to (e) apply in respect of the disposition only if the disposition is after 1999 and at least one person whose life was insured under the policy before March 22, 2016 is alive on March 22, 2016,(ii)in applying paragraphs (c) to (e) in respect of the disposition, a reference in those paragraphs to “the disposition time” is to be read as “the beginning of March 22, 2016”,(iii)if at any time (referred to in this subparagraph as theconversion time) before March 22, 2016 the paid-up capital of a class of shares of the capital stock of a corporation was increased, the increase occurred as a result of any action by which the corporation converted any of its contributed surplus into paid-up capital in respect of the class of shares, the contributed surplus arose in connection with the disposition, and subsection 84(1) did not apply to deem the corporation to pay a dividend at the conversion time in respect of the increase, in computing the paid-up capital in respect of that class of shares after March 21, 2016, there shall be deducted the amount determined by the formula(A − B × A/D) × C/AwhereAis the increase, if any, as a result of the conversion, in the paid-up capital in respect of all the shares of the capital stock of the corporation, computed without reference to this paragraph as it applies to the disposition,Bis the amount determined under subparagraph (a)(i) in respect of the disposition,Cis the increase, if any, as a result of the conversion, in the paid-up capital in respect of the class of shares, computed without reference to this paragraph as it applies to the disposition, andDis the total amount of the corporation’s contributed surplus that arose in connection with the disposition, and(iv)if any consideration given for the interest includes a share of the capital stock of a corporation, the share (or a share substituted for the share) is disposed of (referred to in this subparagraph as theshare disposition) after March 21, 2016 by a taxpayer and subsection 84.1(1) applies in respect of the share disposition, then for the purposes of applying section 84.1, the adjusted cost base to the taxpayer of the share immediately before the share disposition is to be reduced by the amount determined by the formula(A − B x A/C)/DwhereAis the total of all amounts each of which is the fair market value at the disposition time of a share of that capital stock given as consideration for the interest,Bis the greater of the amount determined under subparagraph 148(7)(a)(i) in respect of the disposition and the adjusted cost basis to the policyholder of the interest immediately before the disposition,Cis the fair market value at the disposition time of the consideration, if any, given for the interest, andDis the total number of shares of that capital stock given as consideration for the interest.Marginal note:Idem(8)Notwithstanding any other provision in this section, where(a)an interest of a policyholder in a life insurance policy (other than an annuity contract) has been transferred to the policyholder’s child for no consideration, and(b)a child of the policyholder or a child of the transferee is the person whose life is insured under the policy,the interest shall be deemed to have been disposed of by the policyholder for proceeds of the disposition equal to the adjusted cost basis to the policyholder of the interest immediately before the transfer, and to have been acquired by the person who acquired the interest at a cost equal to those proceeds.Marginal note:Inter vivos transfer to spouse(8.1)Notwithstanding any other provision of this section, where(a)an interest of a policyholder in a life insurance policy (other than a policy that is, or is issued under, a plan or contract referred to in any of paragraphs 148(1)(a) to 148(1)(e)) is transferred to(i)the policyholder’s spouse or common-law partner, or(ii)a former spouse or common-law partner of the policyholder in settlement of rights arising out of their marriage or common-law partnership, and(iii)[Repealed, 1994, c. 7, Sch