Income Tax Regulations — 304
304 (1) For the purposes of this Part and of subsections 12.2(1) and 20(20) and paragraph 148(2)(b) of the Act, prescribed annuity contract , for a taxation year, means (a) an annuity contract that is, or is issued pursuant to, an arrangement described in any of paragraphs 148(1)(a) to (b.4) and (d) of the Act; (b) an annuity contract described in paragraph 148(1)(c) or (e) of the Act; and (c) an annuity contract (i) under which annuity payments have commenced in the taxation year or a preceding taxation year, (ii) issued by any one of the following (referred to in this section as the “issuer”): (A) a life insurance corporation, (B) a registered charity, (C) a corporation referred to in any of paragraphs (a) to (c) of the definition specified financial institution in subsection 248(1) of the Act, (D) a corporation referred to in subparagraph (b)(ii) of the definition retirement savings plan in subsection 146(1) of the Act, and (E) a corporation (other than a mutual fund corporation or a mortgage investment corporation) the principal business of which is the making of loans, (iii) each holder of which (A) is (I) an individual other than a trust, (II) a trust described in paragraph 104(4)(a) of the Act (in this paragraph referred to as a “specified trust”), (III) a trust that is a qualified disability trust (as defined in subsection 122(3) of the Act) for the taxation year in which the annuity is issued, or (IV) if the annuity is issued before 2016, a trust that is a testamentary trust at the time the annuity is issued, (B) is an annuitant under the contract, and (C) throughout the taxation year, dealt at arm’s length with the issuer, (iv) the terms and conditions of which require that, from the time the contract meets the requirements of this paragraph, (A) all payments made out of the contract be equal annuity payments made at regular intervals but not less frequently than annually, subject to the holder’s right to vary the frequency and quantum of payments to be made out of the contract in any taxation year without altering the present value at the beginning of the year of the total payments to be made in that year out of the contract, (B) the annuity payments thereunder continue for a fixed term or (I) if the holder is an individual (other than a trust), for the life of the first holder or until the day of the later of the death of the first holder and the death of any of the spouse, common-law partner, former spouse, former common-law partner, brothers and sisters (in this subparagraph referred to as “the survivor”) of the first holder, or (II) if the holder is a trust 1 in the case of a specified trust, for the life of an individual referred to in paragraph 104(4)(a) of the Act who is entitled to receive all of the income of the trust that arose before the individual’s death, or, in the case of a joint spousal or common-law partner trust, until the day of the later of the death of the individual and the death of the beneficiary under the trust who is the individual’s spouse or common-law partner, 2 in the case of a qualified disability trust, for the life of an individual who is an electing beneficiary (as defined in subsection 122(3) of the Act) of the trust for the taxation year in which the annuity is issued, 3 in the case of a trust (other than a qualified disability trust or specified trust) where the annuity is issued before October 24, 2012, for the life of an individual who is entitled to receive income from the trust, and 4 in the case of a trust (other than a qualified disability trust or specified trust) where the annuity is issued after October 23, 2012, for the life of an individual who was entitled when the contract was first held to receive all of the trust’s income that is from an amount received by the trust on or before the individual’s death as a payment under the annuity, (C) if the annuity payments are to be made over a term that is guaranteed or fixed, the guaranteed or fixed term not exceed 91 years