T-Class provides investors with a tax-efficient cash flow. Unlike traditional SWPs, which generate cash flow by redeeming mutual fund units or shares, T-Class provides a monthly distribution that is entirely return of capital.

Terms you need to know.

Assumes a marginal tax rate of 46.4%.

With a traditional SWP there is a portion of the withdrawal that will be taxable income and a portion that will be return of capital. T-Class’s ROC distributions do not attract tax, which puts more money into your pockets. (Please note that T-Class shares also may pay a taxable quarterly dividend.)

The tax efficiency of T-Class allows you to defer capital gains until they sell their investment, or the ACB drops below zero.

 

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