TAX-EFFICIENT SOLUTIONS

POSITIONING CLIENTS FOR SUCCESS

While generating strong performance is key to building long-term wealth, it’s also important to retain as much of your investment returns as possible. Successful investors often use tax-efficient solutions like corporate class funds and T-Series funds in their non-registered accounts to keep and build even more wealth.

We recognize the importance of tax-efficient solutions and are proud to have been the first to offer tax-efficient funds with the introduction of CI Corporate Class mutual funds. One of the largest asset managers in Canada, CI Corporate Class mutual funds offers a wide range of funds that help investors diversify their portfolios while optimizing tax effectiveness.

SOLUTIONS

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CI CORPORATE CLASS MUTUAL FUNDS

Mutual funds are held in either the unit trust structure or the CI Corporate Class structure. Unit trusts are taxed as separate entities, but the trust itself is not taxed, since it distributes all accumulated income to the unitholders, who are then responsible for their portion of the tax payable.

 

On the other hand, mutual funds in the CI Corporate Class structure are separate share classes within the same corporation, allowing income and expenses to be aggregated. This can lead to lower or tax-deferred distributions to the corporation’s shareholders, as decisions regarding taxation are made at the corporate level to achieve maximum overall tax effectiveness.

 

Over the past decade, the federal government eliminated tax-deferred switching between funds within the same corporation, limiting the effectiveness of some tax-advantaged strategies. However, our CI Corporate Class continues to offer several important benefits, including:

  • The ability to share expenses and income losses to offset income.
  • The ability to share capital losses to offset capital gains.
  • A character conversion benefit for fixed income and foreign dividend-paying funds.
  • A low dividend payout policy for most mandates and tax-efficient distributions.
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T-SERIES FUNDS

Investors with non-registered investments seeking steady cash flow and potential growth should consider T-Series mutual funds. These funds are designed to provide regular, predictable monthly distributions, which can also be customized within certain limits to suit individual needs.

 

The monthly distributions made by our series of T-Series funds are typically characterized as ‘return of capital’ (‘ROC’). Unlike dividends or capital gains, ROC is not taxable. Instead, because the original investment is gradually returned to the investor, the adjusted cost base (ACB) is reduced. This means that tax is deferred until the investment is chosen to be redeemed. At that point, any capital gain (or loss) is realized, giving you greater control over the timing of your tax obligations. In the meantime, you can enjoy tax-efficient monthly payments.

 

It's important to make use of the investment vehicles available to help lower taxes. Learn more about tax-saving strategies by visiting Tax, Retirement and Estate Planning.

 

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TAX-EFFICIENT INSIGHTS

 

Thought leaders and portfolio managers from across CI Global Asset Management offer insights into trends, and policies that are creating investment risks––and opportunities––for tax-efficient investing.

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Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.

Information on this page is not intended to provide legal, accounting, investment or tax advice, and should not be relied upon in that regard. Professional advisors should be consulted prior to acting based on the information contained here.