NEWS WATCH
The income trust as an asset class and the market for trusts has matured since participants were threatened by a new tax regime during the Liberal watch on Ottawa, in late 2005. The Department of Finance Consultation on Flow-through Entities was not a problem for trust owners or issuers. But the stop on trust tax rulings and surrounding negativity by officials in the media appeared so threatening that it caused the single-most significant trust sell-off in more than a decade. Retail investors sold trusts and prices fell 17% on average.
However, the trust market recovered with added strength from both the destructive force of political threat and the Finance decision to reduce taxes on dividends, to “level the playing field” for equities.
iTrust Institute is studying the key features, perceived potential & benefits of income trusts starting from the premise that:
Equities managed and structured like income trusts to flow net gains through to owners by way of frequent and regular distributions of cash can offer superior rates of overall return, support market growth, enhance economic productivity and contribute to growth of the tax base with less risk than other equities given honest managers and a fully competitive market supported by open communications.
We will test this notion and explore related questions.