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Income Tax Regulations

Version of section 2409 from 2004-08-31 to 2013-06-25:

  •  (1) For the purposes of this Part, except as expressly otherwise provided therein, where the expression “immediately preceding taxation year” refers to an insurer’s 1977 taxation year, this Part shall be read as though the definitions therein applied to the insurer’s 1977 taxation year.

  • (2) For the purposes of applying the provisions of paragraph 2400(1)(c) in respect of the 1978 taxation year of an insurer that was subject to the provisions of subsection 138(9) of the Act in respect of its 1977 taxation year, the following rules apply:

    • (a) this Part shall be read as though the definitions therein applied to the insurer’s 1977 taxation year;

    • (b) such portion of the insurer’s Canadian equity property owned by it at the end of its 1977 taxation year as is designated by the insurer in respect of a particular insurance business, in its return of income required by subsection 150(1) of the Act to be filed for the 1978 taxation year, shall be deemed to be investment property of the prior year in respect of the particular insurance business, but the aggregate valuation as at the end of the insurer’s 1977 taxation year of the Canadian equity property so designated in respect of all its insurance businesses carried on in Canada shall not exceed

      • (i) in the case of a life insurer resident in Canada, or a non-resident life insurer that has made the election referred to in subsection 2401(1) in respect of its 1978 taxation year, that proportion of

        • (A) the insurer’s Canadian investment fund as at the end of its 1977 taxation year (determined on the basis of the rules applicable to its 1978 taxation year),

        that

        • (B) the aggregate valuation of the insurer’s equity property as at the end of the insurer’s 1977 taxation year

        is of

        • (C) the aggregate valuation of the insurer’s investment property as at the end of the insurer’s 1977 taxation year,

      • (ii) in the case of a non-resident life insurer, other than an insurer referred to in subparagraph (i), eight per cent of its Canadian investment fund as at the end of its 1977 taxation year (determined on the basis of the rules applicable to its 1978 taxation year), and

      • (iii) in any other case, 25 per cent of the insurer’s Canadian investment fund as at the end of its 1977 taxation year (determined on the basis of the rules applicable to its 1978 taxation year);

    • (c) where the insurer made an election under subsection 138(9) of the Act in respect of its 1977 taxation year, investment property (other than a Canadian equity property) owned by the insurer at the end of its 1977 taxation year that was designated in respect of a particular insurance business by the insurer in its return of income for the 1977 taxation year pursuant to paragraph 138(12)(l) of the Act as it read in its application to that year shall be deemed to be insurance property of the particular insurance business in the 1977 taxation year;

    • (d) where the insurer did not make the election referred to in paragraph (c) and carried on only one insurance business in Canada in its 1977 taxation year, investment property (other than a Canadian equity property) owned by the insurer at the end of its 1977 taxation year that is a specified Canadian asset of the insurer within the meaning of subsection 2405(1) as it read in its application to the 1977 taxation year shall be deemed to be insurance property of that insurance business in the 1977 taxation year; and

    • (e) where the insurer did not make the election referred to in paragraph (c) and carried on an other than life insurance business in Canada and a life insurance business in Canada in its 1977 taxation year, investment property (other than a Canadian equity property) owned by the insurer at the end of its 1977 taxation year each of which is a specified Canadian asset of the insurer, within the meaning of subsection 2405(1) as it read in its application to the 1977 taxation year, in respect of which the aggregate value for the year in respect of the insurer’s 1978 taxation year is equal to the amount, if any, by which

      • (i) the insurer’s mean Canadian reserve liabilities for its 1978 taxation year in respect of its other than life insurance business

      exceeds

      • (ii) the aggregate value for the year in respect of the insurer’s 1978 taxation year of its insurance property of its other than life insurance business as determined for the purposes of clause 2400(1)(c)(ii)(C),

      shall be deemed to be insurance property of the other than life insurance business in the 1977 taxation year and any other such investment property that is a specified Canadian asset of the insurer shall be deemed to be insurance property of the life insurance business in the 1977 taxation year.

  • (3) For the purposes of applying the provisions of section 2402 in respect of the 1978 taxation year of a life insurer, the following rules apply:

    • (a) for the purposes of subparagraphs 2402(a)(i) and (b)(ii), the insurer’s maximum tax actuarial reserve for its 1977 taxation year in respect of participating life insurance policies in Canada shall be deemed to be the amount referred to in subparagraph 2407(b)(ii);

    • (b) for the purposes of clause 2402(a)(ii)(A), the insurer’s maximum tax actuarial reserve for its 1977 taxation year in respect of a class of life insurance policies in Canada shall be deemed to have been determined on the basis of the rules applicable to its 1978 taxation year; and

    • (c) for the purposes of subparagraph 2402(b)(i), the amount deducted by the insurer under subparagraph 138(3)(a)(iv) of the Act in computing its income for the 1977 taxation year shall be deemed to be the amount that is the aggregate determined under paragraph 138(4.2)(b) of the Act in respect of the insurer.

  • (4) Except as expressly otherwise provided in this Part, where the expression “immediately preceding taxation year” occurs in a provision of this Part (other than section 2402) and refers to the insurer’s 1987 taxation year, the provision shall be read as though the definitions in this Part applied in respect of the insurer’s 1987 taxation year.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/79-670, s. 4
  • SOR/80-419, s. 5
  • SOR/90-661, s. 9
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