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ARTICLE · 28 MARCH 2017

Budget 2017: "Switch" Fund Reorganization Rules Introduced

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In Budget 2017, the federal Government proposed new rules that will permit mutual fund corporations constituted as "switch" funds to be reorganized, on a tax-deferred basis, as separate mutual fund trusts.

CanadaTax
Michael Friedman
Michael Friedman
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In Budget 2017, the federal Government proposed new rules that will permit mutual fund corporations constituted as "switch" funds to be reorganized, on a tax-deferred basis, as separate mutual fund trusts.  The new reorganization proposals come as welcome relief to members of the investment fund community that have strongly asserted that the restrictions on "switch" funds introduced as part of Budget 2016 have created operational difficulties without offering any avenue to efficiently respond to the legislative amendments.

Background

In Budget 2016, the federal Government introduced legislative proposals to effectively prohibit investors in mutual fund corporations from exchanging their shares of a particular class for shares of a different class on a tax-deferred basis.

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