Corporate Class Funds

Update regarding RBC Corporate Class Funds

The federal government recently released draft legislation that indicates tax-deferred switches between corporate class funds will be eliminated as of January 1, 2017. The original date announced in the 2016 Federal Budget was October 1, 2016.

RBC Corporate Class Funds continue to operate in the same manner as before the budget announcement. This means you can continue to switch between these funds on a tax-deferred basis until the end of December 2016. After that, any switches between corporate class funds will be treated as taxable dispositions.

Now you can invest in the award-winning PH&N Funds and RBC Funds, with some of the lowest fees in the industry, in a more tax-efficient structure. With Corporate Class Funds, you have two new ways to pay less tax on your investments held outside a registered plan.

Tax-free switching between funds

With Corporate Class Funds, you can switch between funds with no tax cost. That’s possible because each fund in Corporate Class Funds is a class of shares in a single mutual fund corporation. And switching from one class of shares to another class in the same corporation is not a taxable disposition.

So as long as you stay in funds under the Corporate Class Funds umbrella, you’ll defer tax on gains when you switch between funds. Of course, when you eventually redeem out of the corporation you’ll pay tax on any gains you realize – just like any other investment. But the ability to defer tax payments for long periods is a valuable benefit of Corporate Class Funds because more of your money stays invested and working for you.

Reduced taxable distributions

Compared to standard mutual fund trusts, Corporate Class Funds give you an opportunity to pay less tax on income earned inside a fund.

Corporate Class Funds can manage the taxable income and deductions generated by all the funds under its corporate structure. This way, the losses or expenses in one fund can be used to shield taxable income in another fund. That's how Corporate Class Funds can help reduce the taxable distributions you receive.

Are Corporate Class Funds right for you?

  • Are you looking for tax-efficient investments outside of your registered plans such as RRSPs or TFSAs?
  • Do you want to be able to rebalance your holdings with no worries about tax consequences?
  • Do you plan to adjust your holdings to take advantage of market trends over time?
  • Would you like an opportunity to reduce taxable distributions from your mutual funds?
  • Are you a parent or grandparent setting up an in-trust account for a minor child?
  • Do you plan to make charitable contributions with this investment?

If you answered “yes” to any of these questions, please call us at 1-800-661-6141 to speak with an Investment Funds Advisor to determine how you can incorporate Corporate Class Funds in your portfolio.

 

To speak with an Investment Funds Advisor:
Call us at 1.800.661.6141 or
email us at info@phn.com