How Are Variable Annuity Withdrawals Taxed? 
In Canada , variable annuities are called segregated for seg funds . They are similar to mutual funds , but because they are issued by insurance companies there are differences including maturity and death benefit guarantees . Withdrawals from a segregated fund are taxed differently depending on the underlying units , the gain could be taxed as a capital gain , interest or dividend income . You would need to confirm with the issuer to be certain . If you have further questions , or feel that I could be of assistance , please do not hesitate to contact me . 