Performance fee loophole closed on tax-free savings
THE Treasury has published new draft regulations barring the levying of performance fees and extra charges on tax-free savings account (TFSA) investments, a move that will compel some of the largest providers of these accounts to make changes.Many TFSA providers invest savers’ money in underlying investment funds or with third-party investment managers that charge a performance fee."Performance fees may not be charged in TFSAs nor in any of the underlying funds in which the TFSAs are invested," the Treasury said on releasing the amended regulations to the Income Tax Act on Friday. The regulations will kick in next March after consultations with industry players.Old Mutual Emerging Markets, which provides TFSAs with underlying funds, said it welcomed the new regulations.Jean Minnaar, its savings and investment GM, said he was unable to comment until the group had studied the regulations. He also declined to disclose if Old Mutual’s underlying funds charged performance fees. The infor...
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