Income Tax Act — I-3.3 138
iness in Canada, and (b) immediately before that time, the insurer was not carrying on an insurance business in Canada or ceased to be exempt from tax under this Part on any income from such business by reason of any Act of Parliament or anything approved, made or declared to have the force of law thereunder, for the purpose of computing the income of the insurer for the particular taxation year, (c) the insurer shall be deemed to have had a taxation year ending immediately before the commencement of the particular taxation year, (d) for the purposes of paragraph (4)(a), subsection (9), the definition designated insurance property in subsection (12) and paragraphs 12(1)(d), (d.1) and (e), the insurer is deemed to have carried on the business in Canada in that preceding year and to have claimed the maximum amounts to which it would have been entitled under subparagraph (3)(a)(i) and paragraphs 20(1)(l) and (l.1) and 20(7)(c) for that year, (d.1) for the purposes of subsection 20(22) and subparagraph 138(3)(a)(ii.1), (i) the insurer is deemed to have carried on the business referred to in paragraph 138(11.91)(a) in Canada in the preceding taxation year referred to in paragraph 138(11.91)(c), and (ii) the amounts, if any, that would have been prescribed in respect of the insurer for the purposes of paragraphs 138(4)(b) and 12(1)(e.1) for that preceding year in respect of the insurance policies of that business are deemed to have been included in computing its income for that year, and (e) the insurer is deemed to have disposed, immediately before the beginning of the particular taxation year, of each property owned by it at that time that is designated insurance property in respect of the business referred to in paragraph (a) for the particular taxation year, for proceeds of disposition equal to the fair market value at that time and to have reacquired, at the beginning of the particular taxation year, the property at a cost equal to that fair market value. (f) [Repealed, 2013, c. 34, s. 286] Computation of income where insurance business is transferred (11.92) Where, at any time in a taxation year, an insurer (in this subsection referred to as the “vendor”) has disposed of (a) all or substantially all of an insurance business carried on by it in Canada, or (b) all or substantially all of a line of business of an insurance business carried on by it in Canada to a person (in this subsection referred to as the “purchaser”) and obligations in respect of the business or line of business, as the case may be, in respect of which a reserve may be claimed under subparagraph (3)(a)(i) or paragraph 20(7)(c) (in this subsection referred to as the “obligations”) were assumed by the purchaser, the following rules apply: (c) for the purpose of determining the amount of the gross investment revenue required to be included in computing the income of the vendor and the purchaser under subsection 138(9) and the amount of the gains and losses of the vendor and the purchaser from designated insurance property for the year (i) the vendor and the purchaser shall, in addition to their normal taxation years, be deemed to have had a taxation year ending immediately before that time, and (ii) for the taxation years of the vendor and the purchaser following that time, the business or line of business, as the case may be, disposed of to, and the obligations assumed by, the purchaser shall be deemed to have been disposed of or assumed, as the case may be, on the last day of the taxation year referred to in subparagraph 138(11.92)(c)(i), (d) for the purpose of computing the income of the vendor and the purchaser for taxation years ending after that time, (i) an amount paid or payable by the vendor to the purchaser in respect of the obligations, or (ii) an amount in respect of a commission paid or payable by the purchaser to the vendor in respect of the amount referred to in subparagraph 138(11.92)(d)(i) shall be deemed to have been paid or payable or received