news item published on December 16, 2022, we presented the estimated tax impacts for our DFS GIFs and owners of non-registered contracts1. Now that the fiscal year is over, we can share with you the final results, by series, for each of our DFS GIFs:
Tax impact - Table Series IGP
Tax impact - Table Series 1(FirstEdition-NewEra)
Tax impact - Table Series 3(Classic-NewEra)
Tax impact - Table Series 5(Helios)
Tax impact - Table Series 6(Helios2)
Tax impact - Table Series 7(Helios2)
Tax impact - Table Series 8(Helios2)
Important! Rates are presented for illustrative purposes only and do not represent a guarantee of the capital gains or losses that will be allocated to contract owners on their tax slips. Although the rates presented are not estimates, they may not provide an accurate representation of a contract owner's situation, particularly if the contract owner made surrenders/withdrawals during the year (including surrenders/withdrawals performed by us to cover additional fees related to certain guarantees).
It should be noted that allocations of interest and dividend income2 are performed for each month at the end of which the contract owner held fund units, in proportion to the number of units held at the time. Therefore, a contract owner who has made a surrender/withdrawal during the year is generally allocated interest and dividend income even if they do not hold any more units at the end of the year.
For the sake of simplicity, instead of presenting the percentage figures for each end of the month, the tables present an annual percentage based on market value at December 31, 2022.
Capital gains and losses are allocated in 2 phases. Phase 1 consists of allocating capital gains and losses to contract owners who have made a surrender/withdrawal, corresponding to the gains or losses associated with this surrender/withdrawal. Phase 2 consists of allocating gains and losses remaining after phase 1 to all contract owners who hold units on December 31.
The tables present the percentages of gains and losses to be allocated in phase 2.
Example: Let's assume that a contract owner held only one fund—DFS GIF – Balanced, Series 6—through all of 2022 and the market value of this fund was $50,000 on December 31, 2022. Let's also assume that the client did not make any surrenders/withdrawals during this period. The contract owner could expect to see the following amounts on their tax slip:
- Interest and dividend income3 = 0.15% x $50,000 = $75
- Realized capital gain = 3.52% x $50,000 = $1,760
- Realized capital loss = 0.84% x $50,000 = $420
For more details about the method used for allocating income and capital gains and losses, refer to the
news item published on December 16, 2022.
Contract owners' income and capital gains and losses will be communicated individually in the tax slips sent out before March 31, 2023.
1 There is no tax impact for owners of registered contracts (RRSP, RRIF, TFSA, LIRA, LIF, etc.).
2 Total interest and dividend income to be allocated for the year is distributed uniformly on a monthly basis.
3 Represents the actual amount of dividends, not the taxable (grossed-up) amount.