Income Tax Regulations (C.R.C., c. 945)

Regulations are current to 2017-11-20 and last amended on 2017-07-01. Previous Versions

Bus and Truck Operators

 Notwithstanding subsections 2603(3) and (4), the amount of income that shall be deemed to have been earned in a particular province or country other than Canada by an individual from carrying on the business of transportation of goods or passengers (other than by the operation of a railway, ships or an airline service) is 1/2 of the aggregate of

  • (a) that proportion of his income therefrom for the year that the number of miles travelled by his vehicles in the province or country in the fiscal period ending in the year is of the total number of miles travelled by his vehicles in that period; and

  • (b) that proportion of his income therefrom for the year that the aggregate of salaries and wages paid in the fiscal period ending in the year to employees of the permanent establishment in the province or country is of the aggregate of all salaries and wages paid in that period to employees of the business.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/94-686, s. 81(F).

More than One Business

 Where an individual operates more than one business, the provisions of sections 2603 and 2604 shall be applied in respect of each business and the amount of income for the year from carrying on business earned in a particular province or country in the year is the aggregate of the amounts so determined.

Limitations of Business Income

  •  (1) If, in the case of an individual to whom section 2601 applies, the total of the amounts otherwise determined to be the individual’s income for a taxation year from carrying on business that is earned in all provinces and countries other than Canada is greater than the individual’s income for the year, the individual’s income for the year from carrying on business earned in a particular province or country other than Canada is deemed to be that proportion of the individual’s income for the year that

    • (a) the individual’s income for the year from carrying on business in the particular province or country as otherwise determined

    is of

    • (b) that total.

  • (2) If section 114 of the Act applies in respect of an individual for a taxation year, the following rules apply:

    • (a) the portion of subsection (1) before paragraph (a) is to be read as follows in respect of the individual for the year:

      • 2606 (1) If, in the case of an individual to whom section 2601 applies, the total of the amounts otherwise determined to be the individual’s income for a taxation year from carrying on business that is earned in all provinces and countries other than Canada is greater than the individual’s taxable income for the year, the individual’s income for the year from carrying on business earned in a particular province or country other than Canada is deemed to be that proportion of the individual’s taxable income for the year that

    • (b) for the purpose of this Part, the individual’s income for the year from carrying on a business in any place shall be computed by reference only to the income from that business that is included in computing the individual’s taxable income for the year.

  • (3) For the purposes of sections 2603 to 2605, where an individual’s taxable income for the taxation year is computed in accordance with section 115 of the Act,

    • (a) a reference to a “business” shall be deemed to refer only to a business that was wholly or partly carried on in Canada;

    • (b) a reference to “income for the year from carrying on business” shall be deemed to refer only to income for the year from carrying on a business in Canada, as determined for the purposes of section 115 of the Act;

    • (c) a reference to “salaries and wages paid in the year” shall be deemed to be a reference to salaries and wages paid to employees of his permanent establishments in Canada; and

    • (d) a reference to “total gross revenue for the year” from the business shall be deemed to be a reference to total gross revenue reasonably attributable to his permanent establishments in Canada.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/2009-302, s. 9;
  • SOR/2011-195, s. 8(F).

Dual Residence

 Where an individual was resident in more than one province on the last day of the taxation year, for the purposes of this Part, he shall be deemed to have resided on that day only in that province which may reasonably be regarded as his principal place of residence.

Sift Trusts

 For the purposes of this Part, if the individual is a SIFT trust, a reference to income earned in a taxation year shall be read as a reference to the amount that would, if this Part were read without reference to this section, be the amount, if any, by which its income for the taxation year exceeds its taxable SIFT trust distributions for the taxation year.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts and regulations. 2007, c. 29, s. 31.

PART XXVIIGroup Term Life Insurance Benefits

Definitions & Interpretation

Definitions

  •  (1) The definitions in this subsection apply in this Part.

    lump-sum premium

    lump-sum premium in relation to a group term life insurance policy means a premium for insurance under the policy on the life of an individual where all or part of the premium is for insurance that is (or would be if the individual survived) in respect of a period that ends more than 13 months after the earlier of the day on which the premium becomes payable and the day on which it is paid. (prime globale)

    paid-up premium

    paid-up premium in relation to a group term life insurance policy means a premium for insurance under the policy on the life of an individual where the insurance is for the remainder of the lifetime of the individual and no further premiums will be payable for the insurance. (prime d’assurance libérée)

    premium category

    premium category in relation to term insurance provided under a group term life insurance policy means,

    • (a) where the premium rate applicable in respect of term insurance on the life of an individual depends on the group to which the individual belongs, any of the groups for which a premium rate is established, and

    • (b) in any other case, all individuals on whose lives term insurance is in effect under the policy,

    and, for the purpose of this definition, a single premium rate is deemed to apply for all term insurance under a policy in respect of periods in 1994, and where individuals are divided into separate groups solely on the basis of their age, sex, or both, the groups are deemed to be a single group for which a premium rate is established. (catégorie de primes)

    term insurance

    term insurance in relation to an individual and a group term life insurance policy means insurance under the policy on the life of the individual, other than insurance in respect of which a lump-sum premium has become payable or been paid. (assurance temporaire)

Accidental Death Insurance

  • (2) For greater certainty, a premium for insurance on the life of an individual does not include an amount for accidental death insurance.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/97-494, s. 1.

Prescribed Benefit

  •  (1) Subject to subsection (2), for the purpose of subsection 6(4) of the Act, the amount prescribed for a taxation year in respect of insurance under a group term life insurance policy on the life of a taxpayer is the total of

    • (a) the taxpayer’s term insurance benefit under the policy for the calendar year in which the taxation year ends,

    • (b) the taxpayer’s prepaid insurance benefit under the policy for that calendar year, and

    • (c) the total of all sales and excise taxes payable in respect of premiums paid under the policy in that calendar year for insurance on the life of the taxpayer, other than

      • (i) taxes paid, directly or by way of reimbursement, by the taxpayer, and

      • (ii) taxes in respect of premiums for term insurance that, if the taxpayer were to die, would be paid otherwise than

        • (A) to the taxpayer,

        • (B) for the benefit of the taxpayer,

        • (C) as a benefit that the taxpayer desired to have conferred on any person.

Bankrupt Individual

  • (2) Where a taxpayer who has become a bankrupt has two taxation years ending in a calendar year, for the purpose of subsection 6(4) of the Act, the amount prescribed for the first taxation year in respect of insurance under a group term life insurance policy on the life of the taxpayer is nil.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/97-494, s. 1.

Term Insurance Benefit

Amount of Benefit

  •  (1) Subject to section 2704, for the purpose of paragraph 2701(1)(a), a taxpayer’s term insurance benefit under a group term life insurance policy for a calendar year is

    • (a) where

      • (i) the policyholder elects to determine, under this paragraph, the term insurance benefit for the year of each individual whose life is insured under the policy,

      • (ii) no premium rate that applies for term insurance provided under the policy on the life of an individual in respect of the year depends on the age or sex of the individual,

      • (iii) no amounts are payable under the policy for term insurance on the lives of individuals in respect of the year other than premiums payable on a regular basis that are based on the amount of term insurance in force in the year for each individual, and

      • (iv) the year is after 1995,

      the amount determined by the formula

      A - B

      where

      A
      is the total of the premiums payable for term insurance provided under the policy on the taxpayer’s life in respect of periods in the year, to the extent that each such premium is in respect of term insurance that, if the taxpayer died in the year, would be paid to or for the benefit of the taxpayer or as a benefit that the taxpayer desired to have conferred on any person, and
      B
      is the total amount paid by the taxpayer in respect of term insurance under the policy on the taxpayer’s life in respect of the year; and
    • (b) in any other case, the amount, if any, by which

      • (i) the total of all amounts each of which is, for a day in the year on which term insurance is in effect under the policy on the taxpayer’s life, the amount determined by the formula

        A × B

        where

        A
        is the amount of term insurance in effect on that day under the policy on the taxpayer’s life, except the portion, if any, of the amount that, if the taxpayer were to die on that day, would be paid otherwise than
        • (A) to the taxpayer,

        • (B) to benefit of the taxpayer, or

        • (C) as a benefit that the taxpayer desired to have conferred on any person, and

        B
        is the average daily cost of insurance for the year for the premium category in which the taxpayer is included on that day

      exceeds

      • (ii) the total amount paid by the taxpayer in respect of term insurance under the policy on the taxpayer’s life in respect of the year.

Average Daily Cost of Insurance

  • (2) The average daily cost of insurance under a group term life insurance policy for a calendar year for a premium category is

    • (a) subject to paragraph (b), the amount determined by the formula

      (A + B - C) / D

      where

      A
      is the total of the premiums payable for term insurance provided under the policy on the lives of individuals in respect of periods in the year while they are in the premium category,
      B
      is the total of the amounts paid in the year under the policy for term insurance in respect of periods in preceding years (other than amounts that have otherwise been taken into account for the purpose of subsection 6(4) of the Act), to the extent that the total can reasonably be considered to relate to term insurance provided on the lives of individuals in the premium category,
      C
      is the total amount of policy dividends and experience rating refunds paid in the year under the policy and not distributed to individuals whose lives are insured under the policy, to the extent that the total can reasonably be considered to relate to term insurance provided on the lives of individuals in the premium category, and
      D
      is the total of all amounts each of which is the amount of term insurance in force on a day in the year on the lives of individuals in the premium category on that day; or
    • (b) the amount that the policyholder determines using a reasonable method that is substantially similar to the method set out in paragraph (a).

Survivor Income Benefits

  • (3) For the purposes of this section, where the proceeds of term insurance on the life of an individual are payable in the form of periodic payments, and the periodic payments are not an optional form of settlement of a lump-sum amount, the amount of term insurance in effect on the individual’s life on any day is the present value, on that day, of the periodic payments that would be made if the individual were to die on that day.

Determination of Present Value

  • (4) For the purpose of subsection (3), the present value on a day in a calendar year

    • (a) shall be determined using assumptions that are reasonable at some time in the year; and

    • (b) may be determined assuming that an individual on whose life the present value depends is the same age on that day as on another day in the year.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/97-494, s. 1.
 
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