Tax-efficient solutions

A lifetime of tax-smart investing

Whether you’re trying to build savings during your working years or access those savings later in retirement, tax-smart solutions are an important part of your financial plan. Fidelity has the products and services to help you build and maintain a tax-efficient investment strategy – and we can help you work closely with your advisor with a suite of products that includes the following:

Fidelity’s Corporate Class

During the years leading up to retirement, you’ll want to make sure your savings have good growth potential. For those in their asset accumulation years, Fidelity Corporate Class offers tax-deferred growth through the potential for reduced taxable distributions, which means more money staying in your account to grow. 

It’s what you keep that matters
When corporate classes make distributions, they are in the form of Canadian dividends or capital gains dividends. These forms of income are taxed at lower rates than interest income and therefore can potentially provide investors with higher after-tax ret
Illustration tax rates are based on an average of national 2016 top marginal tax rates, weighted based on population: interest income, 51.7%; dividends, 37.1%; capital gains, 25.9%.

 

Fidelity T-SWP® (Tax-Smart Withdrawal Program) and T-SWP® Class

When you reach the point in your life when you want to begin reaping the benefits of your investment plan, you’ll need to consider how best to access your non-registered savings. For those in their retirement and wealth preservation years, Fidelity T-SWP® and T-SWP® Class provide the flexibility to develop customizable and sustainable solutions by generating tax-efficient cash flow.

With T-SWP and T-SWP Class, you can

  • receive tax-efficient monthly cash flow (available in 5% and 8% cash-flow options on a broad range of Fidelity solutions)
  • change between 5% and 8% without triggering capital gains tax
  • turn the cash flow on or off (or adjust it) according to your needs
  • transfer your wealth to a spouse, next of kin and/or charity in a tax-smart way

The Fidelity way: Investment quality

When it comes to non-registered investing, tax efficiency is half of the equation. The other half is investment quality. At Fidelity, we don’t make you choose one over the other. We’re an industry leader in the variety of investment classes that we make available for tax-smart portfolio construction, giving you the flexibility to achieve a wide range of investment objectives.


Talk to your advisor for more information on Fidelity’s tax-smart solutions.

According to a proposed change in the Canadian federal tax rules, effective January 1, 2017, switching shares of a class fund to shares of another class fund within a mutual fund corporation will be deemed a disposition at fair market value for tax purposes and will trigger a capital gain or loss. The proposal does not apply to switches between different series of the same class fund. This information is for general knowledge only and should not be interpreted as tax advice or recommendations. Every individual’s situation is unique and should be reviewed by his or her own personal legal and tax consultants.

Read a fund’s prospectus and consult your advisor before investing. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated. Investors will pay management fees and expenses, may pay commissions or trailing commissions and may experience a gain or a loss.

The monthly cash-flow distributions on Fidelity T-SWP are not guaranteed, will be adjusted from time to time and may include income. We will aim to keep cash flow between 7.5% and 9% of the NAV each year on T-SWP balanced funds on F8, T8 and S8, as well as 4.5% and 5.5% of the NAV on F5, T5 and S5 balanced funds. For equity funds, we will aim to keep cash flow between 6% and 10% of the NAV each year on F8, T8 and S8, and between 4% and 6% of the NAV each year on F5, T5 and S5.

A return of capital reduces an investor’s adjusted cost base. Capital gains taxes are deferred until units are sold or until the ACB goes below zero. Investors should not confuse this cash-flow distribution with a fund’s rate of return or yield. While investors in Series F8/T8/S8 and/or F5/T5/S5 will be able to defer some personal capital gains, they must still pay tax on capital gains distributions that arise from the sale of individual holdings by fund managers, and on interest and dividend distributions. T-SWP will also pay a distribution that must be reinvested in December, consisting of income and capital gains.

Read a fund’s or pool’s prospectus or offering memorandum and speak to an advisor before investing. Read our privacy policy. By using or logging in to this website, you consent to the use of cookies as described in our privacy policy.

This site is for persons in Canada only. Mutual funds sponsored by Fidelity Investments Canada ULC are only qualified for sale in the provinces and territories of Canada.

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