What is a distribution and how does it affect me?

 

A distribution is income paid to unit holders of an investment fund on a monthly, quarterly or annual basis. The distribution can take the form of interest, dividend or capital gain or a combination of all three. A distribution affects a non-registered Account, as the amount of the distribution is taxable. Distributions are not taxable when paid to an RSP, TFSA or Investment Fund Account.

If you hold an investment fund in a non-registered Account and your investment fund pays a distribution, the fund company will mail you a tax slip (called a T3) that you will use to claim the distribution.