Mutual fund trust

A mutual fund trust is a unit trust in which all holdings and transactions in the units comply with the prescribed conditions governing:

• the number of unit holders
• the dispersal of ownership of the units
• public trading of the units

Election of the taxation year

The trust may elect to have its taxation year end on December 15 of a calendar year if:

• it is a mutual fund trust on the 74th day after the end of that calendar year, and
• the taxation year would normally end on December 31

Nevertheless, the fiscal consequences of this election must be taken into account.

Particulars

For the taxation year, a mutual fund trust may designate an amount in respect of a particular unit. This amount must not:

• be greater than the portion of the cost base reductions of all the units for previous years
• have been similarly designated for the year (in respect of the other units), or for the previous years (in respect of all the units)

If you designate such an amount:

• you must report this amount on the RL-16 slip of the unit's owner as income and as an adjustment that increases the unit's adjusted cost base, and
• you may claim a deduction in calculating the trust's income

For further information, refer to the Guide to Filing the Trust Income Tax Return (TP-646.G-V).