I-3 - Taxation Act

Section 176.6 Disposition versions

2017-02-08

176.6. A taxpayer may deduct the least of the following amounts in respect of a life insurance policy (other than an annuity contract or a leveraged insured annuity policy):

(a)  the premium payable by the taxpayer under the life insurance policy in respect of the year, where

i.  an interest in the policy is assigned to a restricted financial institution in the course of a borrowing from the institution,

ii.  the interest payable in respect of the borrowing is or would, but for sections 135.4, 164, 180 to 182 and 194 to 197, be deductible in computing the taxpayer’s income for the year, and

iii.  the assignment referred to in subparagraph i is required by the restricted financial institution as collateral for the borrowing;

(b)  the net cost of pure insurance in respect of the year (other than in respect of a period that begins after 31 December 2013 during which the policy is a leveraged insurance policy), as determined in accordance with the regulations, in respect of the interest in the policy referred to in subparagraph i of paragraph a; and

(c)  the portion, of the lesser of the amounts determined in accordance with paragraphs a and b in respect of the policy, that can reasonably be considered to relate to an amount owing from time to time during the year by the taxpayer to the restricted financial institution under the borrowing.

1993, c. 16, s. 92; 1995, c. 49, s. 56; 2017, c. 1, s. 98.

2006-03-01

176.6. A taxpayer may deduct such portion of the lesser of the following amounts as may reasonably be considered to relate to the amount owing from time to time during the year by the taxpayer to a restricted financial institution under a borrowing from the institution:

(a)  the premium payable by the taxpayer under a life insurance policy, other than an annuity contract, in respect of the year, where

i.  an interest in the policy is assigned to the restricted financial institution in the course of the borrowing;

ii.  the interest payable in respect of the borrowing is or would, but for sections 135.4, 164, 180 to 182 and 194 to 197, be deductible in computing the taxpayer’s income for the year, and

iii.  the assignment referred to in subparagraph i is required by the restricted financial institution as collateral for the borrowing; and

(b)  the net cost of pure insurance in respect of the year, as determined in accordance with the regulations, in respect of the interest in the policy referred to in subparagraph i of paragraph a.

1993, c. 16, s. 92; 1995, c. 49, s. 56.