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What are trust conversions?

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What are trust conversions?

Postby ruodrik » Sun Jun 11, 1972 4:45 am

A trust conversion is done when a company structures itself into an income trust. Some of the benefits:

An income trust is a corporate structure that distributes surplus cash to investors of a business in a tax efficient manner.

Common to all income trusts is a business structure that directs a larger portion of a business' cash flow directly to investors in the form of regular payments.

Income trust investors, called unitholders, own trust units rather than shares.

Operating as an income trust greatly reduces double taxation. Generally in a corporation, such as TELUS today, business profits are taxed at a corporate level and then investors are taxed on their dividends. In an income trust, the business distributes pre-tax income to unitholders, who are then responsible for paying tax on the distributions they receive.

Today, about 240 income funds are listed on the Toronto Stock Exchange (TSX) and the TSX Venture Exchange. Examples of Canadian businesses operating as income trusts are Canadian Oil Sands, Yellow Pages, CI Financial, The Brick and A&W Restaurants.

Hope this helps!
ruodrik
 
Posts: 38
Joined: Mon Oct 29, 2012 10:13 pm

What are trust conversions?

Postby ailbe » Sun Feb 24, 2013 8:25 pm

A trust conversion is done when a company structures itself into an income trust. Some of the benefits:

An income trust is a corporate structure that distributes surplus cash to investors of a business in a tax efficient manner.

Common to all income trusts is a business structure that directs a larger portion of a business' cash flow directly to investors in the form of regular payments.

Income trust investors, called unitholders, own trust units rather than shares.

Operating as an income trust greatly reduces double taxation. Generally in a corporation, such as TELUS today, business profits are taxed at a corporate level and then investors are taxed on their dividends. In an income trust, the business distributes pre-tax income to unitholders, who are then responsible for paying tax on the distributions they receive.

Today, about 240 income funds are listed on the Toronto Stock Exchange (TSX) and the TSX Venture Exchange. Examples of Canadian businesses operating as income trusts are Canadian Oil Sands, Yellow Pages, CI Financial, The Brick and A&W Restaurants.

Hope this helps!
ailbe
 
Posts: 135
Joined: Tue Jun 26, 2012 3:43 am


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