Cove Insight: CRA Issues Warning About Aggressive Tax Schemes Involving Insurance Products
You may have seen recent news about the Canada Revenue Agency issuing a warning regarding certain aggressive tax schemes involving insurance products. We want to address this directly and share our perspective.
The CRA Warning
In December 2025, the CRA identified a number of financial arrangements involving insurance products that it believes are designed to avoid taxes rather than serve any legitimate insurance purpose. The CRA has made clear it will be pursuing participants in these schemes, and we understand that a group of connected individuals who promoted and set up these arrangements are currently under CRA audit.
You can read the CRA’s full notice here:
CRA Warning on Aggressive Tax Schemes Involving Insurance Products
What This Means for You
This warning has no bearing on the planning we have implemented for our clients. The strategies we recommend are conservative, tax-compliant, and built on sound insurance and lending structures. Cove clients with a leveraged insurance plan can be confident that their arrangement is not of the kind the CRA is concerned about. If the tax or regulatory landscape relating to the insurance strategies we have implemented for our clients changes, we will immediately notify our clients and their advisors.
If you have questions, thoughts, or want to talk more about this topic with one of our advisors, please click here to book a meeting with us.