Interest paid to the buyer by the vendor is not taxable. Interest generated by the funds does not need to be included in your tax return as long as the contract remains in force and ceilings are respected.
Ceilings are as follows: $15,000 for the purchase of funeral services and $20,000 for the purchase and maintenance of a burial site, for a total of $35,000. Note that this limit includes the interest income accruing in the fund. Thus, if the total accrued interest and initial funding were to exceed the ceiling, the entire fund would cease to be exempt.
Conditions for Exemption
Funeral services and burial site purchase and maintenance must appear on separate contracts. The amounts must be used to purchase a burial site and funeral services.
Source : Article 148.1. (1)
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