When you place a withdrawal request after the seven-year period, the value of the basket of shares distributed to you will match your pro-rata ownership in the exchange fund. This basket of shares will have a aggregate cost basis equal to the cost basis of your original contribution. The cost basis will be reported to your Cache brokerage account.

To be clear, capital gains will not be realized until you sell the shares you withdraw from the exchange fund. Continuing to hold the shares (or keeping them in the fund past the 7-year anniversary date) can extend the benefits of tax deferral.

See the potential benefits of avoiding tax drag in our exchange fund calculator.