Tax Efficient Solutions

TD Direct Investing has tax-efficient mutual fund solutions that can help you defer and pay less tax on your non-registered investments, including TD Mutual Funds Corporate Class.

What is a Corporate Class fund?

Corporate Class is a mutual fund family set up within a corporate structure. Each fund is offered as a different class of shares in the corporation. The benefit to you is that you can switch between class (funds) in the corporation without triggering capital gains or losses. That means you don't pay taxes on any capital gains until you take your money out of the corporation.

Defer taxes, grow your investments

The ability to defer taxes when you sell a fund and move into another means that you can have more money available to benefit from compound growth. This can lead to faster investment growth.

ExpandSee how it works

In the following example, two investors start by investing $50,000 in similar underlying funds/classes and then switch to a new fund/class every four years, keeping their holdings' exposure identical.

• The person who invested in mutual funds withdraws money each time the investments are switched, to pay taxes on the realized capital gains.
• The investor who took advantage of the Corporate Class structure did not realize any gains until the end of the 12-year period, leaving this investor with over $4,200 more than the investor who used traditional mutual funds.

Results assume an annual rate of return of 8%, taxes paid from investment portfolio, capital gains inclusion rate of 50%, marginal tax rate of 46.41% at the time the securities are redeemed and no distributions.

Mutual fund trusts and classes may have different rates of return, since the classes may incur different expenses. Distributions may also vary for mutual fund trusts and the corresponding classes. Carefully consider the distributions and fees before investing. The graph depicts a trendline, as mutual fund performance may vary over shorter periods of time.

Strength of TD Mutual Funds

When you invest in the TD Mutual Funds Corporate Class, you also gain access to the strength and diversity of TD Mutual Funds. So you can grow your investments on your terms, confident that you have access to one of Canada's leading fund families.

Pay less tax

Another benefit of the TD Mutual Funds Corporate Class is that any fund distributions you receive are in the form of Canadian dividends or capital gains, which are taxed at a lower rate than interest income.

Is Corporate Class right for you?

Do you recognize yourself in any of the following scenarios? If so, you may benefit from TD Mutual Funds Corporate Class:

• I have maximized my RSP and TFSA and am looking for tax-effective investment opportunities
• My company pension plan limits my RSP contributions
• I want more control over the timing for realizing my capital gains

ExpandTD Mutual Funds Corporate Class Options

ExpandImportant Mutual Fund Information