Update on Deans Knight Income Corporation

On May 26, 2023, Deans Knight Income Corporation (the "Company", “DNC”) announced the Supreme Court of Canada upheld the Canada Revenue Agency's application of the general anti-avoidance rule in the Income Tax Act (Canada) to deny the Company from deducting its tax attributes from 2009 – 2012 and dismissed the Company’s appeal.

In 2009, Deans Knight Capital Management (“the Manager” or “DKCM”) was engaged as the portfolio manager for DNC, a closed-end, non-redeemable investment company, which was listed on the Toronto Stock Exchange. From March 16, 2009 - April 30, 2014 the Manager provided services to DNC to achieve its investment objectives of maximizing total return and to pay a monthly dividend. The Company achieved the investment objectives and shareholders who invested at the IPO price of $10/share received $13.26/share in cash via dividends and return of capital over the 5 years that DNC operated as an active investment corporation.

After receipt of a notice of assessment from the CRA, on April 30, 2014 DNC ceased all investing activities and engaged DKCM for a nominal annual fee of $160 to maintain the Company as a reporting issuer while it pursued the appeal. DNC is an entity owned by shareholders and since has had no financial connection to DKCM.

“Unfortunately, after 10 years of defending its position through all levels of the Canadian Court System, DNC ultimately lost its appeal at the Supreme Court of Canada,” said Dillon Cameron, President of DKCM. “While we are disappointed with these results, we accept them and will assist DNC’s legal advisors in the timely wind up of the corporation as originally planned in April 2014.

DKCM is grateful to Burnet, Duckworth and Palmer LLP which advised DNC and presented a case of considerable merit that was strong enough to make it to the highest court in the Country.”

DKCM is a Vancouver based portfolio manager, providing investment solutions to high-net worth individuals, families and institutions in Canada and throughout the globe. This September marks our 30th anniversary and we are grateful to our past and present clientele who have made this milestone possible.

For further information on the tax matter please refer to the DNC website
( www.dkincomecorp.com ).

For further information contact:
Deans Knight Income Corporation
[email protected]