Return of Capital Class: Current Cash Flow, Tax Deferred

The objective of this class is to provide a fixed monthly distribution consisting primarily of a return of investor capital. 

Select any one of our Bond, Balanced or Equity Funds and receive monthly income while deferring your taxes on your investments for many years.

Return of Capital Distribution Rates for the NexGen Canadian Bond, Canadian Turtle Balanced and Canadian Turtle Equity Funds

These Funds offer a distribution rate within the Return of Capital Tax Class option of $0.40/share/year. The NexGen Canadian Bond Fund also offers $0.75/share/year rate which provides investors with more control over their monthly income on the fixed income Funds.

Top Uses:

1. Tax Deferred Cash Flow
   • Receive monthly distributions and defer the tax liability until a more favourable time
2. Tax Free Transition from Growth to Income
   • Switch from Compound Growth Class to Return of Capital Class when your income needs change
3. Tax Efficient Charitable Giving
   • Donate a calculated amount of NexGen shares to redeem your investment tax free, avoiding capital gains tax

Return of Capital Class Marketing Materials 

NexGen Innovation Explained

Who should select this Tax Class:

1. Higher income investors looking for tax deferred cash flow.
2. Investors who need to top up cash flow needs after initial tax credits and low rate taxable income bands have been utilized.
3. Investors who wish to maximize charitable giving while minimizing the impact of capital gains taxes.
4. Investors who wish, over time, to draw down the invested capital from their portfolio and wish to defer the payment of capital gains taxes.
5. Retirees from professional partnerships who have capital losses due to non-deductible expenses.
6. Investors who wish to fine tune their annual capital gain taxes.
7. Investors looking for cash flow that will not trigger OAS clawbacks.

A return of capital distribution is not taxable. However, the distribution decreases the adjusted cost base of the shares, which results in an increase in the capital gain when the shares are eventually sold. If the distribution causes the investor’s adjusted cost base to become negative in any year, the negative amount is taxed as a capital gain returning the adjusted cost base of the shares to zero.