I-3 - Taxation Act

Section 971.3 Disposition versions

2006-03-01

971.3. Notwithstanding any other provision of this Title, where, as a consequence of the death of a policyholder who was resident in Canada immediately before the policyholder’s death, an interest in a life insurance policy, other than a policy referred to in the second paragraph of section 968, has been transferred or distributed to the policyholder’s spouse who was resident in Canada immediately before the policyholder’s death, the interest is deemed to have been disposed of by the policyholder immediately before the policyholder’s death for proceeds of the disposition equal to the adjusted cost basis to the policyholder of the interest immediately before the transfer and to have been acquired by the spouse at a cost equal to those proceeds.

The first paragraph does not apply where the policyholder makes a valid election under subsection 8.2 of section 148 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement) to have that subsection not apply in respect of the transfer.

1993, c. 16, s. 316; 1997, c. 85, s. 228.