The CRA appears to accept that the cash surrender value (CSV) of a life policy held by a corporation can be allocated to a special tracking share (and not other issued shares of the corporation) for the purposes of 70(5), where the tracking share is retractable for that CSV. This is so even where the retraction amount payable won’t be paid until after the death of the insured. 2021-0884291C6
If the tracking share is redeemable for $1 before death, then the value of the share at death will be nominal and the CSV of the policy will be allocated to the other issued shares of the corporation. 2021-0884301C6
