Advisor.ca | Corporate-class, ETFs still tax efficient after budget
It’s going to be more difficult to save tax.
The 2013 Budget took aim at investments that use derivatives to convert income into capital gains, also known as character conversion transactions.
As of March 21, fund managers wouldn’t be able to use forward agreements longer than 180 days to convert interest and dividend income to capital gains. Existing forward agreements wouldn’t be penalized.
While the industry awaits further guidance, experts agree synthetic bond mutual funds (also known as capital yield funds), certain corporate-class funds and some synthetic ETFs would be affected.