The Fund intends to qualify as a MIC throughout its current taxation year and for all of its future taxation years. A MIC is generally able to operate as a flow-through entity so that a shareholder of a MIC is put in a similar position from an income tax perspective as if the investments made by the MIC had been made directly by the shareholder.
Taxation of the Fund
The Fund is a public corporation for tax purposes and as such is subject to tax at the full corporate rate on its taxable income. However, as long as the Fund is a MIC, generally the Fund is able to deduct in computing its income for a taxation year the amount of its income for that year that is distributed to its shareholders. The Fund is entitled to deduct in computing its income for a taxation year: (i) all taxable dividends, other than capital gains dividends, paid by the Fund to its shareholders during the year or within 90 days after the end of the year; and (ii) one-half of all capital gains dividends paid by the Fund to its shareholders during the period commencing 91 days after the commencement of the year and ending 90 days after the end of the year. The Fund must elect to have the full amount of a dividend qualify as a capital gains dividend. The payment of capital gains dividends will allow the Fund to flow capital gains it realizes through to its shareholders.
Historical Tax Allocation
| Year |
Capital Gain |
Interest from Canadian Sources
(Interest Income) |
| 2008 |
0% |
100% |
| 2009 |
0% |
100% |
| 2010 |
0% |
100% |
| 2011 |
0% |
100% |
For complete tax disclosure please see link below: