Are you looking for another tax-advantaged way to save and invest?
With RBC Corporate Class Funds, you can get the value, choice and transparency of RBC Funds and PH&N Funds in a more tax-efficient structure. There are two ways to pay less tax on your investments held outside of a registered plan.
- Reduced taxable distributions
- Generate tax-deferred distributions
RBC Corporate Class Funds include a comprehensive range of funds across various asset classes.
Update regarding 2016 Federal Budget and RBC Corporate Class Funds
The 2016 Federal Budget proposes to amend the Income Tax Act so that a switch between classes of shares of a mutual fund corporation will be considered to be a disposition at fair market value for tax purposes. The change will not apply to switches between different series of the same share class.
The change is expected to take effect beginning on January 1, 2017. Until then, RBC Corporate Class Funds (the Funds) will continue to operate in the same manner as prior to the budget announcement.
Shareholders of the Funds may wish to speak with their financial advisor about their investment options. For more information, including a list of impacted Funds, please refer to the press release.
Generate tax-deferred distributions
If you’re looking to draw a steady stream of tax-efficient cash flow from your non-registered investments, RBC Corporate Class Funds in Series T5 (Series T5) are designed to minimize taxable income and provide tax-deferred monthly distributions in the form of return of capital. Unlike interest and dividend income, return of capital distributions are generally not taxable until your investment in RBC Corporate Class Funds is sold.
Flexible cash flow from 0% to 5% with Series T5
Series T5 funds enable you to customize and adjust your payout rate to suit your income needs without triggering taxes. You can customize monthly cash flow anywhere from 0% to 5% annually by allocating your investment amount between Series T5 and another Series of the same fund or any other RBC Corporate Class Fund. If you want to adjust your payout rate over time, rebalancing between Series T5 and other RBC Corporate Class Funds doesn’t trigger taxes.
What is return of capital?
Return of capital is a tax term used to describe distributions in excess of a fund’s earnings. For tax purposes, return of capital represents a return to the investor of their own capital. The inclusion of return of capital in a distribution doesn’t indicate whether the fund has gained or lost value. Series T5 are designed to minimize taxable income and pay out tax-deferred return of capital, but may distribute some taxable dividends and/or capital gains.
Reduced taxable distributions
Compared to standard mutual fund trusts, RBC Corporate Class Funds give you an opportunity to pay less tax on income earned inside of a fund.
RBC Corporate Class Funds can manage the taxable income and deductions generated by all of the funds under its corporate structure. The losses or expenses in one fund can be used to shield taxable income in another fund, which is how RBC Corporate Class Funds can help reduce the taxable distributions you receive.
Please talk to your advisor or click on Invest Now for options on how to contact us to determine if RBC Corporate Class Funds are right for you.