I live abroad and want to surrender a Canadian life policy. Who files?
The disposition is yours, so the notification is yours. Form T2062B is the notification and clearance route for a non-resident's disposition of an interest in a Canadian life insurance policy, and the obligation follows the disposition rather than the tax result. The insurer is the other party with a stake in it. It is processing the disposition, and in practice it will not settle the proceeds without evidence that the notification has been made. So there are two tasks that look like one from the outside. You make the notification. The insurer wants to see that you have. Starting the notification before you instruct the insurer usually shortens the whole sequence.
Does a policy loan or a partial surrender count as a disposition?
Ask what the transaction does to the interest, not whether cash arrived. An interest in a Canadian life insurance policy is its own category of taxable Canadian property with its own computation, and that computation does not follow the ordinary capital-property pattern, so intuition transfers badly. Surrenders, assignments and transfers of ownership are all capable of disposing of an interest. A borrowing against a policy may or may not, depending on the terms. The practical route is to obtain the policy contract and the insurer's own statement of what it is processing, and to test the notification question against those, before assuming a transaction falls outside it.
The insurer says it needs my clearance before releasing funds. Why?
Because the insurer is processing the disposition, and settling the proceeds without evidence that the notification has been made leaves it carrying a problem that is not its own. That is a commercial position rather than obstruction, and arguing with the claims department rarely moves it. The sequence that works runs the other way round: make the notification, obtain the evidence of it, and give the insurer what its file needs. Two things speed this up. Have the policy documents and the ownership history to hand, because the computation on a life insurance interest is specific to that kind of property. And ask the insurer in writing what evidence it will accept.
I inherited a Canadian life policy and now live abroad. Do I file?
The test is what you are doing now, not how the interest came to you. If you are a non-resident disposing of an interest in a Canadian life insurance policy, the notification route applies, and inheritance does not remove it. What inheritance does change is the evidence. The cost history of the interest usually has to be established from the estate records rather than from your own, and the insurer will want the ownership chain documented before it will process anything. Gather the probate material and the policy file together. The notification is far easier to support once the history behind the interest is settled.
Do I need to file if the policy paid out less than I put in?
The notification obligation comes from the disposition of the interest, and the tax result does not decide whether it arises. A loss position is a reason to compute carefully, not a reason to skip the filing. There is a second reason to file anyway on this kind of property: the insurer is unlikely to settle without evidence the notification has been made, so skipping it delays the money rather than saving effort. And the computation on a life insurance interest is its own thing, not the premiums-in against proceeds-out arithmetic most people do in their heads, so a position that feels like a loss may not be one.
Which documents does my adviser need to make the notification?
Start with the policy contract and every endorsement to it, then the ownership and assignment history, then the insurer's statement of the transaction it is processing. Those three together establish what interest is being disposed of and by whom, which is the part of the file that takes longest. Add whatever cost history exists, including records held outside Canada, because the computation on a life insurance interest has its own basis and cannot be reconstructed from a payout figure alone. Finally, ask the insurer in writing what evidence of the notification it will accept for its own file, so the last step does not become a fresh negotiation.
How do I report the sale of a foreign property?
On your residence-country return, as a disposition, with proceeds and cost base converted at the rates for their own dates. Separately, the country where the property sits may require its own return and may hold back tax at closing until a clearance or certificate is issued — Canada does this for a non-resident vendor, and the United States withholds on a foreign seller of US real property. Those steps have their own deadlines, often before closing. See clearance certificates on a property sale.
Are US-listed ETFs US-situs property for a non-resident's estate?
Shares issued by a US company are generally US-situs for estate tax purposes, and a fund domiciled in the United States is a US company however global its holdings. A fund domiciled elsewhere that holds the same underlying stocks generally is not. That distinction — the domicile of the wrapper rather than the location of the investments — is why cross-border portfolios get restructured, and it should be confirmed against your own holdings before anything is sold. See US estate tax exposure for Canadians.
