Income Trusts, A Winner for Canadian Investors

    Income Trusts: a Winner for Canadian Investors

/24-7PressRelease/ - VANCOUVER, CANADA, October 01, 2005 - CI Mutual Funds was first off the mark. An ambitious Mutual Fund Company, CI was the first high profile, single, independent business, to convert to an Income Trust. THis is a recent mad rush by Canadian Businesses to beat the tax man; increase profits; and enrich their Shareholders. The Royal Bank of Canada was too slow to beat the crackdown by the Finance Minister. The mad rush to hunt for the gold in Income Trusts has started in Canada. Big aggressive Businesses have spotted a lucrative prize and they are running for it. Pension Funds have seen the light. But they must wait cautiously on the sidelines for the government go ahead. To get more detailed insights on what this means to the Profits for the Beginning Investor, see the Blogspot: http://www.Investinginincometrusts.blogspot.com

This is the latest news about Canadian Income Trusts. A year ago, the flurry of news concerned an unfounded fear that ordinary subscribers to these Trusts could be held liable for damages if the Company was forced to make amends following a Court Order. The Ontario Supreme Court put these groundless fears to rest. In a decision handed down last fall, the Court ruled that Ordinary Share holders in these Trusts would not be held liable for damages if these Trusts were sued successfully. A dark cloud of uncertainty has hung over this most promising of Canadian Investments. As an Asset Class, Canadian Income Trusts have out performed all others but precious metals. Canadian Income Trusts have been the saviour for a struggling Mutual Funds Industry. Investors saw their wealth disappear in the Bear Market between March 2000 and the Fall of 2001. Just when we were all hoping that Funds would finally recover then came the economic Black Eye of NINE ELEVEN. Many an Equity Mutual Fund is struggling to show above a 7% rate of returns for five years, 2000 to 2005. Several have lost money. These losses are not restricted to the Technology Balloon where losses were pronounced.

Income Trusts are a special kind of business that has performed exceptionally well in the last five years. Profit is their measure of success. Before 1997, Income trusts existed essentially as part of an Insurance Company's investment portfolio. They were very popular in the United States much sooner. Only recently have they stepped up to the plate in popularity and returns.

When the Minister of Finance ordered his officials to evaluate the tax implications of the conversion of Canadian Businesses to Income Trust tax structure, earlier this month, fund companies panicked. They feared the permanent closure of this clever tax dodge. One of them, Dynamic Mutual Funds commissioned its own Tax Experts for an analysis. To receive a copy of this report in its entirety, send an email to [email protected]. The advice that Dynamic Mutual Funds received from their Consultants was two-fold. First of all, these Experts thought that the most likely legislative change would make these new Income Trust Companies report monthly income distributions as Dividends that carry the advantages of the Canadian Dividend Tax Credit. If that is the main result, according to these Pundits, then the News is Good. Their second bit of advice is that legislative changes are usually not retroactive. Their opinion is that the present favorable tax structure for Income Trusts would not likely end retroactively. Usually, when they change legislation in cases such as this, governments continue any sweet deals that existed before instead of simply closing down the loophole.

In both instances, the Beginning Investor wins. If an Investor is paid in Canadian Dividends, that's the best way to receive income in Canada. Canadian Investors get a Dividend Tax Credit of 33.34% to offset the dividend income they declare. If therefore Investors are worried that these changes would be introduced, they should grab a huge share of the Income Trusts NOW. If you really believe these changes are coming, then you should run out and get you some.

This news really says that the Finance Minister is whining. Tax Officials believe that Income Trusts, the way they currently stand are too efficient in saving taxes for the Investor. You should be in that line up for Tax Savings. Secondly, Businesses are saying that Income Trusts are the best vehicle around for great investment returns, to save taxes, and to create wealth. Here again, as an investor, you want to be counted in that Line.


For More information on Income Trusts and related Money subjects you can reach the Author by email [email protected] Phone: 1-866-686-7243. Visit this Blog for another Article on the subject: http://www.investinginincometrusts.blogspot.com. To find other articles by Alfred Fraser visit the Website http://www.mortgage-freedom.com Alfred Fraser, MA, CEO of Consumer Credit Solutions, is a mortgage debt specialist and a Vancouver Mutual Funds Advisor and with a Masters degree in development economics.

Consumer Credit Solutions is on a success mission teaching how to master debt by turning that burden into OPM, a vital financial tool of the Rich. To learn more: Contact us at 1,866-686(PAID)7243.

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