IFIC applauds budget decision to allow tax-neutral transition into mutual fund trusts

By The IJ Staff | March 24 2017 09:45AM

Paul Bourque

The Investment Funds Institute of Canada (IFIC) praised the federal government’s decision to permit the tax-deferred merger of a mutual fund corporation into mutual fund trusts.

“We commend the minister and his officials for working with the industry to provide the hundreds of thousands of investors in these funds, including people of modest means, with a smooth and equitable transition to the trust in a manner that is tax neutral,” stated Paul C. Bourque, IFIC’s president and CEO, in an announcement March 23.

Provision needed following 2016’s budget

IFIC says this provision was needed following the 2016 federal budget decision to eliminate the deferral of capital gains tax for investors when switching from one fund to another within a mutual fund corporation. IFIC says for the past year it has been working with Department of Finance officials to develop transition rules to permit an orderly restructuring and avoid unnecessary harm to investors

“This provision enables mutual fund corporations to meet their fiduciary obligations to investors and permits funds to be reorganized in a tax-efficient manner,” Bourque said.

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