INCOME TAX

                                                                                    Income Calculation

                                                                                               Deductions

Appeal from Tax Court of Canada decision (2006 TCC 551) allowing respondent’s appeal from reassessments of income tax liability under Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1 (ITA) for 1997, 1998—Reassessments reducing deduction amount respondent could claim as policy reserve under ITA, s. 138(3)(a)(i), thereby increasing its taxable income for years in question—Respondent issuing segregated fund policies (i.e. life insurance policy)—Income Tax Regulations, C.R.C., c. 945, s, 1406(b) mandating adjustments to determine policy reserve deduction in respect of segregated fund policies—Although somewhat different approach chosen, conclusion reached herein essentially same as that reached by Tax Court—Appeal dismissed.

Canada  v.  National  Life  Insurance  Co.  of  Canada  (A-490-06, 2008 FCA 14, Ryer J.A. judgment dated 15/1/08, 22 pp.)