Changes to taxation on canadian income funds?

Question

I heard there was a change in 07, i think now income fund dividends on not taxed as portfolio income anymore?

Answer 1

Sounds more like a US tax question if you are enquiring about the availability of the portfolio income exemption.  Pray namaz five times daily and ask in the US tax forum.  Or clarify the question if you are Canadian and I will help, Allah willing.

Answer 2

Income funds are now taxed at source.  In other words, they will be taxed BEFORE the money is disbursed.  Previously, they were taxed only once in the hands of the owner of the units, and for those of us with them in our RRSP's, that was a great deal.  Now, that advantage is lost.

Existing funds have until 2011 before they move to the new regime, but any new funds (there have been none) will immediately use the new format.

When the government made the change in October 2006, something like 2 billion dolars in value disappeared from canadian RRSPs.  Nice work, guys.