Income Tax Act — I-3.3 207.6
Creation of trust 207.6 (1) In respect of the subject property of a retirement compensation arrangement, other than subject property of the arrangement held by a trust governed by a retirement compensation arrangement, for the purposes of this Part and Part I, the following rules apply: (a) a trust is deemed to be created on the day that the arrangement is established; (b) the subject property of the arrangement is deemed to be property of the trust and not to be property of any other person; and (c) the custodian of the arrangement is deemed to be the trustee having ownership or control of the trust property. Life insurance policies (2) For the purposes of this Part and Part I, where by virtue of a plan or arrangement an employer is obliged to provide benefits that are to be received or enjoyed by any person on, after or in contemplation of any substantial change in the services rendered by a taxpayer, the retirement of a taxpayer or the loss of an office or employment of a taxpayer, and where the employer, former employer or a person or partnership with whom or which the employer or former employer does not deal at arm’s length acquires an interest in a life insurance policy that may reasonably be considered to be acquired to fund, in whole or in part, those benefits, the following rules apply in respect of the plan or arrangement if it is not otherwise a retirement compensation arrangement and is not excluded from the definition retirement compensation arrangement , in subsection 248(1), by any of paragraphs (a) to (l) and (n) thereof: (a) the person or partnership that acquired the interest is deemed to be the custodian of a retirement compensation arrangement; (b) the interest is deemed to be subject property of the retirement compensation arrangement; (c) an amount equal to twice the amount of any premium paid in respect of the interest or any repayment of a policy loan thereunder is deemed to be a contribution under the retirement compensation arrangement; and (d) any payment received in respect of the interest, including a policy loan, and any amount received as a refund of refundable tax is deemed to be an amount received out of or under the retirement compensation arrangement by the recipient and not to be a payment of any other amount. Incorporated employee (3) For the purpose of the provisions of this Act relating to retirement compensation arrangements, where (a) a corporation that at any time carried on a personal services business, or an employee of the corporation, enters into a plan or arrangement with a person or partnership (referred to in this subsection as the “employer”) to whom or which the corporation renders services, and (b) the plan or arrangement provides for benefits to be received or enjoyed by any person on, after or in contemplation of the cessation of, or any substantial change in, the services rendered by the corporation, or an employee of the corporation, to the employer, the following rules apply: (c) the employer and the corporation are deemed to be an employer and employee, respectively, in relation to each other, and (d) any benefits to be received or enjoyed by any person under the plan or arrangement are deemed to be benefits to be received or enjoyed by the person on, after or in contemplation of a substantial change in the services rendered by the corporation. Deemed contribution (4) Where at any time an employee benefit plan becomes a retirement compensation arrangement as a consequence of a change of the custodian of the plan or as a consequence of the custodian ceasing either to carry on business through a fixed place of business in Canada or to be licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee, (a) for the purposes of this Part and Part I, the custodian of the plan is deemed to have made a contribution to the arrangement immediately after that time, in an amount equal to t