Section 131 — Excise Tax Act: Segregated fund a separate person

For the purposes of this Part, a segregated fund of an insurer shall be deemed to be a trust that is a separate person from the insurer and that does not deal at arm’s length with the insurer and the insurer shall be deemed to be a trustee of that trust; the activities of the segregated fund shall be deemed to be activities of the trust and not activities of the insurer; and where, at any time, an amount (other than an amount in respect of tax under this Part) is deducted from the fund, if the amount is in respect of property or a service that the fund is, because of the operation of this Part other than this paragraph, considered to have acquired from the insurer, that supply shall be deemed to be a taxable supply and the amount shall be deemed to be consideration for that supply that becomes due at that time, and if the amount is not in respect of property or a service that the fund is, because of the operation of this Part other than this paragraph, considered to have acquired either from the insurer or another person, the insurer shall be deemed to have made, and the fund shall be deemed to have received, at that time, a taxable supply of a service and the amount shall be deemed to be consideration for the supply that becomes due at that time. Paragraph (1)(c) does not apply to an amount deducted from a segregated fund of an insurer if the amount is a distribution of income, a payment of a benefit, or the amount of a redemption, in respect of an interest of another person in the fund; or the amount is a prescribed amount.