The objective of this class is to provide a fixed monthly distribution consisting primarily of a return of investor capital. Investors can expect to receive a steady monthly income while deferring taxes on their investments for many years. 

To view the individual distribution rates for each Fund, click here

Top Uses:

  1. Tax Deferred Cash Flow

    • Ideal for investors looking to receive monthly distributions and defer their tax liability until a more favourable time.
  2. Transition from Growth to Income

    • Individuals who transition to require annual cash flow can switch out of another tax class into the Return of Capital Class without triggering any immediate tax consequences.
  3. Tax Efficient Charitable Giving

    • Investors who wish to maximize charitable giving while minimizing the impact of capital gains can use their Return of Capital shares as a tool for carrying our their philanthropic goals.
  4. Minimizing OAS Clawbacks

    • Ideal for retirees who wish to minimize withdrawals from registered accounts and/or minimize the impact of investment income on OAS clawbacks.
  5. Retirement Investment Portfolio

    • Perfect for investors who wish, over time, to draw down the invested capital from their portfolio and wish to defer the payment of capital gains taxes.

 

A return of capital distribution is not taxable. However, the distribution decreases the adjusted cost base of the shares, which results in an increase in the capital gain when the shares are eventually sold. If the distribution causes the investor’s adjusted cost base to become negative in any year, the negative amount is taxed as a capital gain returning the adjusted cost base of the shares to zero.