Many people think of segregated fund policies and mutual funds as essentially the same product, with the main distinction being the guarantees provided by a segregated fund investment. In fact, many investors do not draw a distinction between the two products. However, there are significant differences between the two products from a legal, regulatory and tax perspective which are not often well understood.

In this latest edition of CALU Report, CALU members Russ Lavoie and Susan Ellis focus on the tax aspects of these funds, and review the differences between the products to explain why the tax results can sometimes differ significantly.

The topics covered in this report include:

  • Segregated Funds versus Mutual Funds
  • The Income Tax Act Deeming Rules
  • Distributions versus Allocations
  • Mutual Fund Distribution Model
  • Segregated Fund Allocation Models
  • Time-Weighted Allocations
  • Point-in-Time Allocations
  • Blended Allocations
  • Capital Gains Mismatches
  • Capital Gains Refund Mechanism for Mutual Funds
  • ACB Adjustments for Segregated Funds
  • Determining Income to Allocate
  • How much income should be reported?
  • Budget 2017
  • Segregated fund mergers
  • Segregated fund non-capital loss carry-forwards

(Members only)

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