Taxation of Prescribed Life Annuities

Prescribed Life Annuities today have favorable tax treatment. On  January 1, 2017 that will change.  The taxable portion of a prescribed life annuity will increase significantly.

Currently the Income Tax Act uses life expectancy tables that were issued in 1971. These tables will be replaced with new longer life expectancies tables, which will result in the taxable portion of the annuity payment being much greater than it is today.

looking for guaranteed income for the rest of your of life you could benefit from significant tax savings if you purchase an Prescribed Life Annuity before 2017.