Frequently Asked Questions
Need more information? Browse the FAQs below.
Preserving wealth by saving taxes.
A Terra LP invests in a diversified portfolio of publicly traded resource firms. The fund provides favourable tax deductions and tax credits for reducing income taxes and aims to produce attractive returns.
A Terra LP is a proven tax planning tool for reducing income taxes and building wealth. Specific attributes of a Terra LP include low cost, expert portfolio management and early rollover/maturity.
Track Record & Performance
Since inception in 2005 Terra LPs have provided investors over $260 million in tax benefits; made over 500 investments in oil & gas and mining companies and matured in less than 10 months.
Terra flow-through lp’s have outperformed their peer-group averages in 5 of the past 6 years. See our Past Performance.
Who Can Purchase?
Canadian residents who are individuals and are of the age of majority in their province or territory can invest in a Terra LP, so long as they qualify as an accredited investor (all provinces) or eligible investor (AB, SK, MB, NS) or reside in BC.
Yes, corporations, partnerships, trusts and certain other organizations may invest in a Terra LP if they qualify as an accredited investor or eligible investor or invest $150,000 or more.
See our new automated online subscription agreement, Quick Fill Subscription.
Tax Deductions, Credits & Other Benefits
The LP provides tax deductions of up to 100% for the 2019 taxation year and 115% over the life of the partnership. Additionally, the partnership provides 15% federal investment tax credits and provincial tax credits for qualified mining investments.
We make it simple for you to see the tax savings for a given level of income (by province) and how to maximize those savings. See our Tax Savings Calculator.
Resource investments have long been of interest to investors due to two important benefits: diversification and inflation protection. With resource sector valuations at cyclical lows there is also the potential for significant investment gains through commodity price appreciation.
Investment & Rollover Details
The minimum investment is $2,500 and larger purchases are in increments of $100.
There are no investment limits for accredited investors in any province. Eligible investors in the provinces of AB, SK and NS can invest up to $30,000, or up to $100,000 if they receive suitability advice. There are no investment limits for BC investors or eligible investors in MB.
Investors receive a T5013 federal tax receipt (or RL 15 tax receipt for Québec residents) on or about March 31 of the following year. This tax receipt shows the tax deductions, tax credits and other expenses that may be claimed by the investor on their tax return for reducing taxes.
Once the LP has finished raising funds month-end market pricing is available on our website or third party reporting websites, including globefund.com.
The targeted maturity date is June of the next calendar year.
Maturity automatically occurs without requiring any action on the part of the investor. Investors receive corporate class fund shares, which may be sold or reinvested, transferred to an RRSP or donated for additional tax savings. The shares can also be contributed to a regular investment account or TFSA, but no additional tax savings will result.
Any sale, transfer, donation or redemption will trigger a capital gain. The resulting capital gain is equal to the difference between the proceeds received and the adjusted cost base (ACB) and this difference is taxed at the investors’ capital gains tax rate. The ACB is posted on this website or can be obtained from Terra.
RRSP Transfers & Donations
Yes, on maturity your investment in a Terra LP may be transferred to your RRSP or donated to charity for additional tax savings. See our Tax Savings Calculator.
Yes, if you have capital losses to utilize. Any capital losses available can be applied to reduce or eliminate capital gains tax owing, which increases the tax savings received and further reduces the net cash outlay. For more information, see our Tax Savings Calculator.
Fees & Costs
The management fee is 2%.
The performance bonus, if earned, is 20% of any gains over the initial investment amount and is calculated and payable on rollover/maturity.
No, Terra LPs do not pay trailer or service fees.
Class A units pay a sales commission of up to 5.75% and compensates advisors for providing tax and investment advice related to a Terra LP investment. The commission is paid by the partnership and is tax deductible.
No load Class F units, do not charge a sales commission and are available for direct purchase or through advisors offering “managed”, “wrap” or “fee only” accounts.
Risk is managed in several ways including:
- the portfolio is diversified and invested in approximately 20 public companies. To learn more about the investment portfolio, see How We Build Portfolios;
- the investments are managed by an expert investment team who actively manage the portfolio. For more information, see Investment Team; and
- investor’s receive attractive tax savings which typically lowers their cash outlay by approximately 50% and provides a “cushion” against losses. In other words, the investment can decline substantially before a loss is incurred. For more information about cash outlay, see our Tax Savings Calculator.
Safety and security are very important to our business and we use several procedural controls to protect your account including:
- Bank-level encryption protects your data. Our 128-bit SSL certificate encrypts all information transmitted between your computer and our web servers, protecting your password and account details.
- We use a third-party custodian to hold your assets. Terra can't access your funds other than to provide trade instructions or charge our management fee. Our custodian, National Bank Independent Network (formerly NBCN) is backed by the financial strength and ongoing support of National Bank of Canada.