I-3 - Taxation Act

Section 844.4 Disposition versions

2020-09-24

844.4. Where a life insurer has transferred or lent property, directly or indirectly in any manner whatever, to a person or partnership, in this section referred to as the “transferee”, that is affiliated with the insurer or a person or partnership that does not deal at arm’s length with the insurer and that property, property substituted for that property or property the acquisition of which was assisted by the transfer or loan of that property was property described in any of subparagraphs a to d of the second paragraph of section 844.3 of the transferee for a period of time in a taxation year of the insurer, the following rules apply:

(a)  section 844.3 shall apply to the insurer to include an amount in computing its income for the year on the assumption that the property was owned by the insurer for the period, was property described in any of subparagraphs a to d of the second paragraph of section 844.3 of the insurer and was used or held by it in the year in the course of carrying on an insurance business in Canada;

(b)  an amount included in the insurer’s income for the year under section 844.3 by reason of the application of this section shall,

i.  where subparagraph ii does not apply, be added by the insurer in computing the cost to it of shares of the capital stock of or a right in the transferee at the end of the year, or

ii.  where the insurer and the transferee make a valid election under subsection 4.5 of section 138 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) after 19 December 2006 in relation to the property, be added in computing

(1)  where the property is land, or a right therein, described in subparagraph a of the second paragraph of section 844.3 of the transferee, the cost to the transferee of the land or the right therein;

(2)  where the property is land, a building or a right therein described in any of subparagraphs b to d of the second paragraph of section 844.3, the capital cost to the transferee of the right in the building described in subparagraph b of the said paragraph.

Chapter V.2 of Title II of Book I applies in relation to an election made under subsection 4.5 of section 138 of the Income Tax Act or in relation to an election made under this section before 20 December 2006.

1990, c. 59, s. 322; 1997, c. 3, s. 71; 1997, c. 31, s. 143; 1998, c. 16, s. 207; 2009, c. 5, s. 352; 2020, c. 16, s. 188.

2009-05-15

844.4. Where a life insurer has transferred or lent property, directly or indirectly in any manner whatever, to a person or partnership, in this section referred to as the “transferee”, that is affiliated with the insurer or a person or partnership that does not deal at arm’s length with the insurer and that property, property substituted for that property or property the acquisition of which was assisted by the transfer or loan of that property was property described in any of subparagraphs a to d of the second paragraph of section 844.3 of the transferee for a period of time in a taxation year of the insurer, the following rules apply:

(a)  section 844.3 shall apply to the insurer to include an amount in computing its income for the year on the assumption that the property was owned by the insurer for the period, was property described in any of subparagraphs a to d of the second paragraph of section 844.3 of the insurer and was used or held by it in the year in the course of carrying on an insurance business in Canada;

(b)  an amount included in the insurer’s income for the year under section 844.3 by reason of the application of this section shall,

i.  where subparagraph ii does not apply, be added by the insurer in computing the cost to it of shares of the capital stock of or an interest in the transferee at the end of the year, or

ii.  where the insurer and the transferee make a valid election under subsection 4.5 of section 138 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) after 19 December 2006 in relation to the property, be added in computing

(1)  where the property is land, or an interest therein, described in subparagraph a of the second paragraph of section 844.3 of the transferee, the cost to the transferee of the land or the interest therein;

(2)  where the property is land, a building or an interest therein described in any of subparagraphs b to d of the second paragraph of section 844.3, the capital cost to the transferee of the interest in the building described in subparagraph b of the said paragraph.

Chapter V.2 of Title II of Book I applies in relation to an election made under subsection 4.5 of section 138 of the Income Tax Act or in relation to an election made under this section before 20 December 2006.

1990, c. 59, s. 322; 1997, c. 3, s. 71; 1997, c. 31, s. 143; 1998, c. 16, s. 207; 2009, c. 5, s. 352.

2006-03-01

844.4. Where a life insurer has transferred or lent property, directly or indirectly in any manner whatever, to a person or partnership, in this section referred to as the “transferee”, that is affiliated with the insurer or a person or partnership that does not deal at arm’s length with the insurer and that property, property substituted for that property or property the acquisition of which was assisted by the transfer or loan of that property was property described in any of subparagraphs a to d of the second paragraph of section 844.3 of the transferee for a period of time in a taxation year of the insurer, the following rules apply:

(a)  section 844.3 shall apply to the insurer to include an amount in computing its income for the year on the assumption that the property was owned by the insurer for the period, was property described in any of subparagraphs a to d of the second paragraph of section 844.3 of the insurer and was used or held by it in the year in the course of carrying on an insurance business in Canada;

(b)  an amount included in the insurer’s income for the year under section 844.3 by reason of the application of this section shall,

i.  where subparagraph ii does not apply, be added by the insurer in computing the cost to it of shares of the capital stock of or an interest in the transferee at the end of the year, or

ii.  where the insurer and the transferee have jointly elected in prescribed form on or before the earliest of their filing-due dates for the taxation year that includes the period, be added in computing

(1)  where the property is land, or an interest therein, described in subparagraph a of the second paragraph of section 844.3 of the transferee, the cost to the transferee of the land or the interest therein;

(2)  where the property is land, a building or an interest therein described in any of subparagraphs b to d of the second paragraph of section 844.3, the capital cost to the transferee of the interest in the building described in subparagraph b of the said paragraph.

1990, c. 59, s. 322; 1997, c. 3, s. 71; 1997, c. 31, s. 143; 1998, c. 16, s. 207.