LAWYER'S SECTION

WARNINGS!

• Do not negotiate a lump sum settlement and then ask that it be converted into the annuity. If the Canada Customs and Revenue Agency (CCRA) discovers that a lump sum settlement was reached and then converted all or in part to a structure, the tax department may disallow the tax-free status of the structure resulting in a tax liability to the client.
  
  
• Do not allow the plaintiff or your law firm to receive the annuity premium. The annuity must be purchased directly by the casualty insurer or its counsel. The tax-free status of a structure can be nullified if the purchase price of the annuity is paid to the plaintiff or his/her lawyer.