Will a higher capital gains inclusion rate affect mutual fund investors in Canada? Carl Hinzmann discusses the question with Investment Executive

In Budget 2024, the federal government proposed to raise the capital gains inclusion rate for individuals, trusts and corporations. This change could result in higher taxes for investors receiving capital gains distributions from mutual funds; however, mutual fund corporations and trusts are expected to be less affected by this change compared to other types of corporations and trusts.

Carl Hinzmann, a tax partner at Gowling WLG, shared his insights with Investment Executive regarding mutual fund corporations and trusts. “One of the benefits of a mutual fund corporation or a mutual fund trust is they’re generally able to act as a conduit for capital gains, so they’re able to pass those on to their investors,” said Carl. This means that gains are taxed in the hands of the investors.

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• Higher capital gains inclusion rate and mutual funds

Read our full Budget 2024 tax analysis here.

Read “Is it time for the Federal Government to simplify the definition of “qualified investments”? Carl Hinzmann shares his thoughts with Investment Executive”

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