Income Tax Act — I-3.3 18
deration 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 consideration is paid, or (iv) subject to clause (iii)(B) and subsections 144.1(4) to (7), as consideration for a designated employee benefit (as defined in subsection 144.1(1)) to be provided after the end of the year (other than consideration payable in the year, to a corporation that is licensed to provide insurance, for insurance coverage in respect of the year); (b) such portion of each outlay or expense (other than an outlay or expense of a corporation, partnership or trust as, on account of, in lieu of payment of or in satisfaction of, interest) made or incurred as would, but for paragraph 18(9)(a), be deductible in computing a taxpayer’s income for a taxation year shall be deductible in computing the taxpayer’s income for the subsequent year to which it can reasonably be considered to relate; (c) for the purposes of section 37.1, such portion of each qualified expenditure (within the meaning assigned by subsection 37.1(5)) as was made by a taxpayer in a taxation year and as would, but for paragraph 18(9)(a), have been deductible in computing the taxpayer’s income for the year shall be deemed (i) not to be a qualified expenditure made by the taxpayer in the year, and (ii) to be a qualified expenditure made by the taxpayer in the subsequent year to which the expenditure can reasonably be considered to relate; (d) for the purpose of paragraph 18(9)(a), an outlay or expense of a taxpayer is deemed not to include any payment referred to in subparagraph 37(1)(a)(ii) or 37(1)(a)(iii) that (i) is made by the taxpayer to a person or partnership with which the taxpayer deals at arm’s length, and (ii) is not an expenditure described in subparagraph 37(1)(a)(i); and (e) for the purposes of section 37 and the definition qualified expenditure in subsection 127(9), the portion of an expenditure that is made or incurred by a taxpayer in a taxation year and that would, but for paragraph 18(9)(a), have been deductible under section 37 in computing the taxpayer’s income for the year, is deemed (i) not to be made or incurred by the taxpayer in the year, and (ii) to be made or incurred by the taxpayer in the subsequent taxation year to which the expenditure can reasonably be considered to relate. (f) [Repealed, 2017, c. 20, s. 3] Group term life insurance (9.01) Where (a) a taxpayer pays a premium after February 1994 and before 1997 under a group term life insurance policy for insurance on the life of an individual, (b) the insurance is for the remainder of the individual’s lifetime, and (c) no further premiums will be payable for the insurance, no amount may be deducted in computing the taxpayer’s income for a taxation year from a business or property in respect of the premium except that there may be so deducted, (d) where the year is the taxation year in which the premium was paid or a subsequent taxation year and the individual is alive at the end of the year, the lesser of (i) the amount determined by the formula A - B and (ii) 1/3 of the amount determined by the formula (A × C)/365 where A is the amount that would, if this Act were read without reference to this subsection, be deductible in respect of the premium in computing the taxpayer’s income, B is the total amount deductible in respect of the premium in computing the taxpayer’s income for preceding taxation years, and C is the number of days in the year, and (e) where the individual died in the year, the amount determined under subparagraph 18(9.01)(d)(i). Application of subsection (9) to insurers (9.02) For the purpose of subsection (9), an outlay or expense made or incurred by an insurer in a taxation year on account of the acquisition of an insurance policy at any time prior to the issuance of the policy is deemed to be an expense incurred as consideration for services rendered in the particular year that the policy is issued. Penalties, b