Music Royalties Inc. Pays 66th Dividend and Declares Future Dividends as a Return of Capital
- Music Royalties Inc.
- Jul 16
- 3 min read
July 15, 2025, Toronto, Canada. Music Royalties Inc. (‘MRI’) is pleased to announce the payment of its 66th dividend representing a cumulative $0.16 per share in dividends paid to shareholders since 2019. The cumulative 16 cents in dividends represents a 107% return on capital for initial investors who invested at $0.15 per share, a 40% return in dividends for $0.40 per share investors and up to a 32% return in dividends for $0.50 per share investors, before capital gains. New investors at $0.50 per share receive $0.036 per year for a starting 7.2% yield, which is more than double the average S&P/TSX 60 dividend of 2.7% and almost six times the S&P 500 dividend yield of 1.25%.
Since 2019, all dividends paid by MRI to Canadian shareholders have been fully taxed as non-eligible dividends reported on T5 slips benefitting from a dividend tax credit. Non-resident shareholders have been subject to a 15% withholding tax. In order to maximize the future after tax yield for all existing and new investors, MRI will declare all future dividends to be a ‘Return of Capital’ (‘ROC’). As a result, future distributions are not taxed in the year they are received as they will be characterized as a return of the initial investment rather than dividend income. ROC distributions will reduce the adjusted cost base (‘ACB’) of investment in MRI shares, which in effect converts the ROC distributions into capital gains when the investment is eventually sold.
Tax Implications:
No immediate tax: ROC distributions are not generally taxed as income in the year they are received.
Reduced ACB: The amount of ROC received reduces the ACB of your investment.
Impact on capital gains/losses: When you sell the investment, the reduced ACB will result in a larger capital gain (or a smaller capital loss).
Potential for taxable capital gains: If the ROC reduces the ACB below zero, the excess is treated as a capital gain in the year it reduces the ACB to zero or below.
“The investment universe is complicated and at times it is unclear how to compare returns and yields between different companies, funds and product offerings. Since MRI has built up over $30 million in paid up capital, it can declare up to that amount as a return of capital to shareholders without attracting tax. This will effectively convert the current 7.2% dividend yield to an equivalent 14% pre-tax yield for both existing and new investors who pay tax at the maximum Canadian rate. It will increase the cash paid to non-resident shareholders by 17.6%, by eliminating the withholding tax. MRI monthly payments will now be considered a ‘Return of Capital’ and not taxed in the year received, a very timely and exciting cash flow benefit to all MRI investors. It is important that all shareholders seek their own tax advice and keep track of their ACB”, stated Tim Gallagher, CEO.
About Music Royalties Inc.
Music Royalties Inc. is an artist, music fan and investor virtual partnership which provides direct exposure to music revenues from global streaming platforms by acquiring royalties for shareholders. MRI has increased share value by accretively acquiring a diversified portfolio of 31 cash flowing royalties from over 7,000 songs.
Contact
Tim Gallagher Connor Gallagher Andrew Robertson
CEO Investor Relations Director
+1 416-925-0090 +1 647-921-2206 +1 416-317-0137
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