“for pooled investments, payment of accrued taxes on unrealized gains may be required.”
Found this in the reading on SMAs vs pooled investments. Can anyone explain this?
In some countries (I think the US for mutal funds).
Individuals are liable for their share of any taxes the mutual fund incurs or is liable for.
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To add to MikeyF’s post,
in Canada, mutual funds sometimes do a distribution so that the unit holders rather than the fund are liable for taxes on capital gains and dividends. Even if those distributions are automatically reinvested in the fund, the unit holder is still liable for the taxes
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