I-3 - Taxation Act

Section 851.11 Disposition versions

2006-03-01

851.11. Where, at a particular time, a segregated fund trust has property that was funded with a portion of the premiums paid before that time under a segregated fund policy relating to the trust, that portion of the premiums is deemed not to have been paid in respect of those premiums and the holder of such a policy is deemed to have an interest in the trust that is not in respect of any particular property or any separate source of income.

The cost of that interest to the policyholder at a particular time is deemed to be equal to the aggregate of the amount that would be the adjusted cost base on 31 December 1977, to the insurer, of the property described in the first paragraph if that interest had been a capital property at all times prior to 1978 and if the rules provided in this chapter, but for the words “capital loss” and “loss” in section 851.16, had applied to the taxation years 1972 to 1977, and the portion, other than that representing the costs of acquisition, of the premiums described in the said paragraph and paid before that time but after the insurer’s taxation year 1977, that the insurer has used or must use to fund the property of the segregated fund.

1978, c. 26, s. 165; 1996, c. 39, s. 273.