Due to changes in the Canadian Income Tax Act mortality tables will be updated January 2, 2017. There will be no change to the gross amount of income that a prescribed annuity issued by Empire Life generates. What will change is the taxable portion of each prescribed annuity payment, with a higher portion of each payment being taxable under the new formula. To be eligible for the 2016 formula for prescribed annuity taxation all applications and money must be received in good order by 4:00 pm December 30, 2016. All applications and/or money received after 4:00 pm December 30, 2016 will receive the 2017 formula for prescribed annuity taxation. This includes letters of commitment that were submitted in December and funds received in 2017; the taxable portion will be re-calculated based on the new rates.
Did you know that the annuity quote guarantees the interest rate used to calculate your annuity payment, not the income amount. The income quoted may vary if any of the quote details (i.e., purchase date, income starting date, date of birth etc.) used in the calculation change.
