DRI Healthcare Trust is expecting to make significant annual dry income distributions of its pharmaceutical royalty income
DRI Healthcare Trust, which will be a mutual fund trust trading on the TSX, will establish a wholly-owned Irish subsidiary to acquire a portfolios of pharmaceutical royalties, either directly or through purchasing the LP units and general partner of Delaware partnerships holding such royalties. It expects to make cash distributions that are significantly lower than its income (which will be mostly in the form of FAPI) and will distribute the resulting “dry income” through making additional unit issuances, which will then be promptly consolidated to get back to the initial number of units. Given the offshore situs of its assets, it will not be subject to SIFT tax.
The Treaty between Ireland and the U.S. (where most of the royalties may be sourced) is expected to reduce the U.S. withholding tax rate on such royalties to nil. The PFIC rules will apply.
Neal Armstrong. Summary of 25 Janaury 2021 DRI Healthcare Trust preliminary base prep prospectus under Offerings – REIT, Trust and LP Offerings – Foreign Asset Income Funds and LPs.