Stradley Ronon Stevens & Young, LLP 2005 Market Street, Suite 2600 Philadelphia, PA 19103 Telephone 215.564.8000 Fax 215.564.8120 www.stradley.com
EX-99.(12)
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Xxxxxxxx Ronon Xxxxxxx & Xxxxx, LLP
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Telephone 000.000.0000
Fax 000.000.0000
xxx.xxxxxxxx.xxx |
February 26, 2018
Board of Trustees, Ivy Funds
0000 Xxxxx Xxxxxx
Xxxxxxx Xxxxxxx, XX 00000-0000
| Re: | Agreement and Plan of Reorganization (“Agreement”) made as of October 9, 2017 by the Ivy Funds (the “Trust”), a statutory trust created under the laws of the State of Delaware, on behalf of two of its series, the Ivy Dividend Opportunities Fund (the “Acquired Fund’) and Ivy Global Equity Income Fund (the “Acquiring Fund”) |
Ladies and Gentlemen:
You have requested our opinion as to certain federal income tax consequences of the reorganization (hereinafter referred to as the “Reorganization”) of the Acquired Fund, which will consist of: (i) the Acquired Fund shall transfer all of its respective Assets to the Acquiring Fund in exchange solely for full and fractional Class A, Class B, Class C, Class E, Class I, Class R, Class N and Class Y shares of beneficial interest of the Acquiring Fund (“Acquiring Fund Shares”); (ii) the assumption by the Trust on behalf of the Acquiring Fund of all of the Liabilities of the Acquired Fund; (iii) the distribution of the Acquiring Fund’s shares to the shareholders of the Acquired Fund according to their respective interests in complete liquidation of the Acquired Fund (“Acquired Fund Shares”); and (iv) the dissolution of the Acquired Fund as soon as practicable after the closing date (the “Closing Date”), all upon and subject to the terms and conditions of the Agreement. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Agreement.
In rendering our opinion, we have reviewed and relied upon: (a) a copy of the executed Agreement, dated as of October 9, 2017; (b) the Combined Prospectus and Proxy Statement provided to shareholders of the Acquired Funds dated November 30, 2017; (c) certain representations concerning the Reorganization made to us by the Trust, on behalf of the Acquiring Fund and the Acquired Fund, in a letter dated February 26, 2018 (the “Representation Letter”); (d) all other documents, financial and other reports and corporate minutes we deemed relevant or appropriate; and (e) such statutes, regulations, rulings and decisions as we deemed material in rendering this opinion.
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A Pennsylvania Limited Liability Partnership
Board of Trustees, Ivy Funds
February 26, 2018
Page 2
For purposes of this opinion, we have assumed that the Acquired Fund on the Closing Date of the Reorganization satisfies, and immediately following the Closing Date of the Reorganization, the Acquiring Fund will continue to satisfy, the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), for qualification as regulated investment companies.
Based on the foregoing, and provided the Reorganization is carried out in accordance with the applicable laws of the State of Delaware, the terms of the Agreement and the statements in the Representation Letter for the Acquired Fund and the Acquiring Fund, it is our opinion that for federal income tax purposes:
1. The acquisition by the Acquiring Fund of all of the Assets of the Acquired Fund in exchange for the Acquiring Fund Shares and the assumption by the corresponding Acquiring Fund of the Liabilities of the Acquired Fund, followed by the distribution by the Acquired Fund to its shareholders of the Acquiring Fund Shares in complete liquidation of the Acquired Fund, will qualify as a reorganization within the meaning of Section 368(a)(1) of the Code, and the Acquired Fund and Acquiring Fund each will be a “party to the reorganization” within the meaning of Section 368(b) of the Code.
2. No gain or loss will be recognized by the Acquired Fund upon the transfer of all of its Assets to, and assumption of its Liabilities by, the Acquiring Fund in exchange solely for the Acquiring Fund Shares pursuant to Sections 361(a) and 357(a) of the Code.
3. No gain or loss will be recognized by the Acquiring Fund upon the receipt by it of all of the Assets of the Acquired Fund in exchange solely for the Acquiring Fund Shares and the assumption by the Acquiring Fund of the Liabilities of the Acquired Fund pursuant to Section 1032(a) of the Code.
4. No gain or loss will be recognized by the Acquired Fund upon the distribution of the Acquiring Fund Shares to its shareholders in complete liquidation of the Acquired Fund pursuant to Section 361(c)(1) of the Code.
5. The tax basis of the Assets of the Acquired Fund received by the Acquiring Fund will be the same as the tax basis of the Assets to the Acquired Fund immediately prior to the exchange pursuant to Section 362(b) of the Code.
6. The holding periods of the Assets of the Acquired Fund received by the Acquiring Fund will include the periods during which such Assets were held by the Acquired Fund pursuant to Section 1223(2) of the Code.
7. No gain or loss will be recognized by the shareholders of the Acquired Fund upon the exchange of their Acquired Fund Shares solely for the Acquiring Fund Shares (including fractional shares to which they may be entitled), pursuant to Section 354(a) of the Code.
Board of Trustees, Ivy Funds
February 26, 2018
Page 3
8. The aggregate tax basis of the Acquiring Fund Shares received by the shareholders of the Acquired Fund (including fractional shares to which they may be entitled) will be the same as the aggregate tax basis of the Acquired Fund Shares exchanged therefor pursuant to Section 358(a)(1) of the Code.
9. The holding period of the Acquiring Fund Shares received by the shareholders of the Acquired Fund (including fractional shares to which they may be entitled) will include the holding period of the Acquired Fund Shares surrendered in exchange therefor, provided that such Acquired Fund Shares were held as a capital asset on the date of the Reorganization pursuant to Section 1223(1) of the Code.
10. The Acquiring Fund will succeed to and take into account, as of the date of the transfer as defined in Section 1.381(b)-1(b) of the regulations issued by the United States Department of the Treasury (the “Income Tax Regulations”), the items of the Acquired Fund described in Section 381(c) of the Code, subject to the conditions and limitations specified in Sections 381, 382, 383 and 384 of the Code, and the Income Tax Regulations.
Notwithstanding anything to the contrary herein, we express no opinion as to the effect of the Reorganization on the Acquired Fund, the Acquiring Fund or any Acquired Fund shareholders with respect to any asset (including without limitation any stock held in a passive foreign investment company as defined in section 1297(a) of the Code or any contract described in Section 1256(b) of the Code) as to which any unrealized gain or loss is required to be recognized for federal income tax purposes at the end of a taxable year (or on the termination or transfer thereof) regardless of whether such transfer would otherwise be a non-taxable transaction under the Code.
Our opinion is based upon the Code, the applicable Income Tax Regulations, the present positions of the Internal Revenue Service (the “Service”) as are set forth in published revenue rulings and revenue procedures, present administrative positions of the Service, and existing judicial decisions, all of which are subject to change either prospectively or retroactively. We do not undertake to make any continuing analysis of the facts or relevant law following the date of the Reorganization.
Our opinion is conditioned upon the performance by the Trust, on behalf of the Acquiring Fund and the Acquired Fund, of the undertakings in the Agreement and the Representation Letter. Except as expressly set forth above, we express no other opinion to any party as to the tax consequences, whether federal, state, local or foreign, with respect to (i) the Reorganization or any transaction related to or contemplated by such Reorganization (or incident thereto) or (ii) the effect, if any, of the Reorganization on any other transaction and/or the effect, if any, of any such other transaction on the Reorganization.
Board of Trustees, Ivy Funds
February 26, 2018
Page 4
We hereby consent to the use of this opinion as an exhibit to the registration statement of each Acquiring Fund on Form N-14, and any amendments thereto, covering the registration of the Acquiring Fund Shares under the Securities Act of 1933, as amended, to be issued in the Reorganization.
| Very truly yours, |
| /s/ Xxxxxxxx Ronon Xxxxxxx & Young, LLP |
| Xxxxxxxx Ronon Xxxxxxx & Xxxxx, LLP |
