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Corporate loophole closed

Thursday, January 12, 2017 @ 7:00 PM | By Robert Kepes and Jennifer Leve

Last March the federal budget introduced changes that affect tax treatment of life insurance policy transfers and deaths of policy holders. To examine them, we first must see how the Income Tax Act treats life insurance policies.

A corporation can be the beneficiary of a policy and may fund the policy by paying the premiums. While premiums are not usually deductible to the corporation, the benefit of having a corporation pay premiums is that premiums can be financed with corporate dollars, which is better than personal...