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The Dept. of Finance releases draft legislation concerning the “allocation to redeemers” methodology and extends the capital gains-related timeline for ETFs
Sorry thought relate to us.. But article about Canadian taxation s
FYI, this is a partial delay of a proposed Canadian tax law. It pertains to Canada's "allocation to redeemers" methodology.
As I understand it (from a brief skim of the article given below), the idea is that when you sell shares of a fund, any gains that it triggers (because the fund has to sell appreciated shares to raise cash) gets passed to you directly. That would seem to eliminate the problem of distributing capital gains annually, or at least cap gains triggered by redemptions. (The fund is allowed to reduce its tax liability by the amount of the gain it allocates to the redeeming shareholder.)
I'm not sure if I got that right. Just a quick skim, and not all that interested in Canadian tax laws. But for those who are, here's a background piece:
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As I understand it (from a brief skim of the article given below), the idea is that when you sell shares of a fund, any gains that it triggers (because the fund has to sell appreciated shares to raise cash) gets passed to you directly. That would seem to eliminate the problem of distributing capital gains annually, or at least cap gains triggered by redemptions. (The fund is allowed to reduce its tax liability by the amount of the gain it allocates to the redeeming shareholder.)
I'm not sure if I got that right. Just a quick skim, and not all that interested in Canadian tax laws. But for those who are, here's a background piece:
https://www.lexology.com/library/detail.aspx?g=18581104-5813-4f3e-a434-5a144cc25cd2