Welcome to the Shroomery Message Board! You are experiencing a small sample of what the site has to offer. Please login or register to post messages and view our exclusive members-only content. You'll gain access to additional forums, file attachments, board customizations, encrypted private messages, and much more!
Can anyone here explain the Canadian Income Tax Act in relation to foreign investors? Canadian royalty trusts invest in oil and gas and many pay about 10-11% dividend yield. Will foreign investors ever be taxed on royalty trusts and if so, what percentage do you think it would be?
NEWS RELEASE TRANSMITTED BY CCNMatthews
FOR: PETROFUND ENERGY TRUST
TSX SYMBOL: PTF.UN AMEX SYMBOL: PTF Petrofund Energy Trust Addresses Proposed Income Tax Act Amendments MARCH 24, 2004 - 18:22:21 ET CALGARY, ALBERTA--(CCNMatthews - Mar 24, 2004) - In response to numerous inquiries, Petrofund Energy Trust is providing clarity on the affect on the Trust from the Canadian Government's amendments to the Income Tax Act announced in the Federal Government's budget address yesterday.
Petrofund is not affected by the government's changes to the treatment of withholding tax on distributions for non-residents. Petrofund's treatment of non-resident distributions already complies with the provisions announced in the budget in light of an ambiguity in certain of Canada's tax treaties. As such, there are no changes contemplated or required by the Trust. Consequently, this issue does not impact unitholders.
Pension fund ownership restrictions announced in the Federal Budget are also not expected to have an impact on Petrofund in that pension fund restrictions indicated in the budget only apply to investments in business income trusts, not oil and gas royalty trusts such as Petrofund.
Finally, the Federal government has also proposed changes in the Income Tax Act that will eliminate Petrofund's current exemption from "not being maintained primarily for the benefit of non-residents". With the exemption removed, Petrofund will be required to attain majority Canadian ownership by January 1, 2007, to maintain its status as a Mutual Fund Trust. Petrofund's non-resident ownership level is estimated at 66% as of February 27, 2004. Management of the Trust is currently reviewing its options and will determine an appropriate course of action to achieve compliance within the almost 3 year time frame. In the meantime, there are no immediate effects expected from non-resident ownership requirements on Petrofund.
Future legislative change is an ongoing risk associated with the Trust. Petrofund will continue to monitor this situation on an ongoing basis with the intent to maintain its status as a mutual fund trust. Unitholders will be kept apprised of any changes. As well, Petrofund will continue its active program to encourage and promote Canadian ownership.
Petrofund Energy Trust is a Calgary based royalty trust that acquires and manages producing oil and gas properties in Western Canada. The Trust makes monthly cash distributions to unitholders, which are derived from the Trust's cash flow from these properties. Petrofund Energy Trust was founded in 1988 and was one of the first oil and gas royalty trusts in Canada. In accordance with its trust indenture, Petrofund was established and is required to be maintained primarily for the benefit of Canadian residents.
This news release may include statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements provisions contained in the U.S. Private Securities Litigation Reform Act of 1995. Petrofund Energy Trust cautions that actual performance will be affected by a number of factors, many of which are beyond its control. Future events and results may vary substantially from what Petrofund Energy Trust currently foresees. Discussion of the various factors that may affect future results is contained in Petrofund Energy Trust's recent filings with the Securities and Exchange Commission and Canadian securities regulatory authorities.
You cannot start new topics / You cannot reply to topics HTML is disabled / BBCode is enabled
Moderator: Enlil 394 topic views. 1 members, 2 guests and 5 web crawlers are browsing this forum.
[ Toggle Favorite | Print Topic | Stats ]