I-3 - Taxation Act

Section 976 Disposition versions

2019-06-19

976. In this Title and in sections 92.11 to 92.19, the adjusted cost basis to the holder of life insurance policy of his interest in the policy at a particular time means the amount by which the amount computed under section 976.1 is exceeded by the aggregate of:

(a)  the cost to him of each interest acquired by him in the policy before that particular time but not including an amount referred to in paragraph b or d;

(b)  the amounts paid before that particular time by him or on his behalf in respect of a premium under the policy, other than amounts referred to in subparagraph 3 of subparagraph i of paragraph b.4 of section 966, in subparagraph 1 of subparagraph ii of that subparagraph b.4 or in subparagraph 2 of subparagraph ii of paragraph a of section 967;

(c)  the amounts in respect of the disposition of an interest in the policy before that particular time that he was required to include in computing his income or his income earned in Canada as determined under Part II for a taxation year;

(d)  the amounts in respect of the repayment, before the particular time and after 31 March 1978, of a policy loan, without exceeding the amount determined under section 976.0.1;

(e)  the amount by which the cash surrender value of the policy as at its first anniversary date after 31 March 1977 exceeds the adjusted cost base, determined under the provisions of this Part which were then applicable but without taking sections 978 and 979 into account, of his interest in the policy on that anniversary date;

(f)  the amounts in respect of his interest in the policy that he included in computing his income for any taxation year ending before the particular time by virtue of section 92 or sections 92.11 to 92.19;

(g)  the amounts paid to him in respect of his interest in the policy to the extent to which prescribed tax was imposed on them before the particular time;

(h)  in the case of an interest in a life annuity contract, within the meaning of the regulations under section 966, to which section 92.11 applies for the taxation year that includes the particular time or would apply if the contract had an anniversary day in the year at a time when the taxpayer held the interest, all amounts each of which is a mortality gain, within the meaning of the regulations and determined by the issuer of the contract in accordance with the regulations, in respect of the interest immediately before the end of the calendar year ending in a taxation year commencing before the particular time; and

(i)  in the case of an interest in a life insurance policy, other than an annuity contract, to which section 971.3 applied before the particular time, all amounts each of which is a mortality gain, within the meaning of the regulations and determined by the issuer of the policy in accordance with the regulations, in respect of the interest immediately before the end of the calendar year that ended in a taxation year that began before the particular time.

1972, c. 23, s. 707; 1978, c. 26, s. 190; 1980, c. 13, s. 99; 1982, c. 5, s. 173; 1984, c. 15, s. 226; 1985, c. 25, s. 141; 1986, c. 19, s. 179; 1991, c. 25, s. 161; 1993, c. 16, s. 317; 1994, c. 22, s. 308; 1998, c. 16, s. 215; 2001, c. 53, s. 209; 2019, c. 14, s. 287.

2006-03-01

976. In this Title and in sections 92.11 to 92.19, the adjusted cost basis to the holder of life insurance policy of his interest in the policy at a particular time means the amount by which the amount computed under section 976.1 is exceeded by the aggregate of:

(a)  the cost to him of each interest acquired by him in the policy before that particular time but not including an amount referred to in paragraph b or d;

(b)  the amounts paid before that particular time by him or on his behalf in respect of a premium under the policy, other than amounts referred to in subparagraph 3 of subparagraph i of paragraph b.4 of section 966, in subparagraph 1 of subparagraph ii of that subparagraph b.4 or in subparagraph 2 of subparagraph ii of paragraph a of section 967;

(c)  the amounts in respect of the disposition of an interest in the policy before that particular time that he was required to include in computing his income or his income earned in Canada as determined under Part II for a taxation year;

(d)  the amounts repaid, except any repayment deductible under paragraph k of section 157 as it read before its repeal or under paragraph i of section 336 or described in subparagraph 2 of subparagraph ii of paragraph a of section 967, after 31 March 1978 and before that particular time of a policy loan in respect of the policy, not exceeding the aggregate of the proceeds of the disposition of an interest in the policy in respect of that loan and the amount payable on 31 March 1978 in respect of a policy loan in respect of the policy;

(e)  the amount by which the cash surrender value of the policy as at its first anniversary date after 31 March 1977 exceeds the adjusted cost base, determined under the provisions of this Part which were then applicable but without taking sections 978 and 979 into account, of his interest in the policy on that anniversary date;

(f)  the amounts in respect of his interest in the policy that he included in computing his income for any taxation year ending before the particular time by virtue of section 92 or sections 92.11 to 92.19;

(g)  the amounts paid to him in respect of his interest in the policy to the extent to which prescribed tax was imposed on them before the particular time;

(h)  in the case of an interest in a life annuity contract, within the meaning of the regulations under section 966, to which section 92.11 applies for the taxation year that includes the particular time or would apply if the contract had an anniversary day in the year at a time when the taxpayer held the interest, all amounts each of which is a mortality gain, within the meaning of the regulations and determined by the issuer of the contract in accordance with the regulations, in respect of the interest immediately before the end of the calendar year ending in a taxation year commencing before the particular time; and

(i)  in the case of an interest in a life insurance policy, other than an annuity contract, to which section 971.3 applied before that time, the total of all amounts each of which is a mortality gain, as defined by regulation and determined by the issuer of the policy in accordance with the regulations, in respect of the interest immediately before the end of the calendar year ending in a taxation year beginning before the particular time.

1972, c. 23, s. 707; 1978, c. 26, s. 190; 1980, c. 13, s. 99; 1982, c. 5, s. 173; 1984, c. 15, s. 226; 1985, c. 25, s. 141; 1986, c. 19, s. 179; 1991, c. 25, s. 161; 1993, c. 16, s. 317; 1994, c. 22, s. 308; 1998, c. 16, s. 215; 2001, c. 53, s. 209.