1. Non-Registered Segregated Fund Registered Fund The owner (individual, trust or corporation) of the contract must report any income allocated to them from the fund every year. Unlike mutual funds, seg funds provide a death and/or maturity guarantee that protects a portion of invested capital. A non-registered plan (commonly referred to as ‘open’ or ‘investment accounts’) enables investors to invest an unlimited amount of money in funds with exposure throughout the world. A seg fund usually has a higher MER than a mutual fund, partly to cover the fund’s insurance features. This article will focus on non-registered, personally owned segregated fund investments. As of July 20, 2020, Sun Life Global Investments (Canada) Inc. changed its name to SLGI Asset Management Inc. Sun Life Financial Trust Inc. is the issuer of Guaranteed Investment Certificates. This difference is due to the cost of the death and maturity benefits. funds, including taxation differences on non-registered funds. endstream endobj startxref When a client’s buying seg fund solely to minimize probate, she needs to consider whether the fund’s additional annual cost is more or less than the probate savings that will eventually be realized. It’s important to do a deeper dive, and really understand the tax reporting considerations on segregated funds, as such details will put you in a better position to help your clients. How much you withdraw from your RRSP vs. TFSA vs. non-registered. Select your funds. As there is no inheritance tax in Canada, all income earned by the deceased is taxed on a final return. Taxation is based on how long you own the segregated fund units within the income period. 11.1 - reinvested distribution buys 1.1 units ($10.00/$9.00), In both instances, the market value after the distribution or allocation = $100, Fund level - the segregated fund must allocate income and capital gains/losses to its owners/unitholders each year on a time-weighted basis; and. + read full definition product sold by life insurance Life Insurance Insurance that pays cash to your family or other beneficiary after your death. No account fees (other than applicable sales charges) Potentially higher rate of return than on your bank account, and you have … Taxation for non-registered segregated fund contracts. Tax advantages for non-registered savings; Book an appointment . I understand I can unsubscribe at any time. Choose a registered or non-registered contract • Only purchase the contract if the youngest annuitant is at least age 80 and no more than 90 years of age when the policy is issued • Name a person to receive the death benefit • Withdraw money from your contract • Receive regular payments now or later The choices you make may affect your taxes, see the section . When non-registered units are redeemed, the insurance company will calculate the realized gain or loss and report this on the investor’s T3 form. All proceeds are paid tax-free to the beneficiary and, in addition, there are no probate fees charged to these assets. • Both may cover different asset classes that fit a wide variety of investment objectives. The owner, annuitant and beneficiary are all separate roles regarding the contract itself. This can give them income and help pay your funeral and other final costs. Pat's advisor tells him that only the owner of a non-registered segregated fund account can: a) name a successor owner. 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