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.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus, which contains detailed investment information, before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
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.
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 Fidelity’s tax-efficient series (Fidelity Tax-Smart CashFlow®) 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. Fidelity Tax-Smart CashFlow will also pay a year-end distribution that must be reinvested in additional securities of the applicable fund.
The monthly cash-flow distributions on Fidelity Tax-Smart CashFlow 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 9.0% of the NAV each year on Fidelity Tax-Smart CashFlow F8, T8 and S8 balanced funds, 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 6.0% and 10.0% of the NAV each year on F8, T8 and S8, and between 4.0% and 6.0% of the NAV each year on F5, T5 and S5.
Fidelity Corporate Class Funds are issued by Fidelity Capital Structure Corp. and are available through authorized dealers.
