Commentary

E1.453F Life insurance gains—transaction-related calculations

Personal and employment tax

E1.453F Life insurance gains—transaction-related calculations

E1.453F Life insurance gains—transaction-related calculations

These calculations are made where during the insurance year1:

  1.  

    •     there has been an assignment for money's worth of a part or share in the rights in a policy or contract, or

  2.  

    •     a surrender of part of the rights followed by a gift of all or part of the rights

The purpose of these provisions is to isolate such transactions and to determine how much of the premiums can be set against the receipt. The provisions ensure that liability attaches to the person who profits from the transaction, regardless of the change in the ownership of the rights in the policy or contract. In the

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