Canetic Resources Trust provides 2006 Canadian tax information to Canetic unitholders and to former unitholders of Acclaim Energ
February 28 2007 - 11:25PM
PR Newswire (US)
CALGARY, Feb. 28 /PRNewswire-FirstCall/ -- (CNE.UN - TSX)- Canetic
Resources Trust ("Canetic") is pleased to provide 2006 tax
information to Canadian unitholders of Canetic and to former
Canadian unitholders of Acclaim Energy Trust ("Acclaim") and
StarPoint Energy Trust ("StarPoint"). 2006 U.S. tax information is
currently being compiled and will be announced under a separate
news release. The information contained herein is intended to
provide information for 2006 income tax reporting for Canadian
resident individual holders of Canetic trust units and former
Canadian resident individual holders of Acclaim or StarPoint trust
units. It is not exhaustive of all income tax considerations and is
not intended to constitute legal or tax advice to any holder,
former holder, or potential holder of Canetic, Acclaim or StarPoint
trust units. Readers should consult their own legal or tax advisors
as to their particular tax consequences of holding Canetic, Acclaim
or StarPoint trust units. Canetic 2006 Distributions
-------------------------- Canetic qualifies as a mutual fund trust
under the Income Tax Act (Canada) (the "Tax Act") and the trust
units of Canetic are qualified investments for a Registered
Retirement Savings Plan ("RRSP"), Registered Retirement Income Fund
("RRIF"), Registered Education Savings Plan ("RESP") or Deferred
Profit Sharing Plan ("DPSP"). For Canadian unitholders, monthly
trust distributions are comprised of a taxable (income) portion and
a tax-deferred (return of capital) portion. The taxable portion is
determined directly from the calculation of Canetic's taxable
income and is dependent upon various tax deductions that Canetic
may claim against its income for tax purposes for the year. Taxable
amounts are reported in Canetic's T3 return and are allocated to
individual unitholders via T3 supplementary slips prepared by
Canetic's transfer agent, brokers or other intermediaries.
Unitholders are then generally required to include their
proportionate share of this income allocation in their tax return
for the year. Unitholders are required to reduce the Adjusted Cost
Base ("ACB") of their units held by the amount of the distributions
considered to be a non-taxable return of capital each year. When a
unitholder's ACB drops below zero during a taxation year the
negative amount is considered to be a capital gain, provided the
units are held as capital property. Unitholders pay income tax on
this gain which resets their ACB to zero for the start of the
following year. Unitholders are strongly encouraged to maintain an
ongoing record of the return of capital portion of trust
distributions and regularly update their ACB calculations. Each
unitholder is solely responsible for his or her own ACB
calculations; Canetic neither tracks nor provides advice in this
respect. Units Held within an RRSP, RRIF, RESP or DPSP
--------------------------------------------- Unitholders who held
Canetic units in a RRSP, RRIF, RESP or DPSP should not report any
amount on their 2006 T1 Income Tax Return. Units Held outside an
RRSP, RRIF, RESP or DPSP
---------------------------------------------- Unitholders who held
Canetic units outside of an RRSP, RRIF, RESP or DPSP will receive a
"T3 Supplementary" slip postmarked on or before March 31, 2007.
Canetic's Canadian registered unitholders will receive "T3
Supplementary" slips directly from Canetic's transfer agent,
Computershare Trust Company of Canada. Canetic units held through a
broker or other intermediary will receive a "T3 Supplementary" slip
from the broker or other intermediary and not from the transfer
agent or from Canetic. Canetic has determined that distributions
received by Canadian resident unitholders in respect of the 2006
taxation year are 100% taxable (income) and 0% tax-deferred (return
of capital). The taxable portion of distributions are to be
reported as "Other income" and will be included in Box (26) of the
"T3 Supplementary" slip. 2006 Summary of Canetic Canadian Tax
Information ------------------------------------------------ The
table below summarizes, on a per unit basis, the taxability of cash
distributions paid and included in the 2006 "T3 Supplementary"
slips, which, for Canadian tax purposes, will include distributions
with record dates from January 31, 2006 to December 29, 2006. 2006
CASH DISTRIBUTION INFORMATION FOR CANADIAN UNITHOLDERS ($/UNIT)
---------------------------------------------------------------------
Return of Taxable Capital Cash Amount Amount Distribution (100%)
(0%) Record Date Payment Date ($CDN) ($CDN) ($CDN)
---------------------------------------------------------------------
Jan 31 2006 Feb 15 2006 0.23 0.23 0.00 Feb 28 2006 Mar 15 2006 0.23
0.23 0.00 Mar 31 2006 Apr 13 2006 0.23 0.23 0.00 Apr 28 2006 May 15
2006 0.23 0.23 0.00 May 31 2006 Jun 15 2006 0.23 0.23 0.00 Jun 30
2006 Jul 14 2006 0.23 0.23 0.00 Jul 31 2006 Aug 15 2006 0.23 0.23
0.00 Aug 31 2006 Sep 15 2006 0.23 0.23 0.00 Sep 29 2006 Oct 13 2006
0.23 0.23 0.00 Oct 31 2006 Nov 15 2006 0.23 0.23 0.00 Nov 30 2006
Dec 15 2006 0.23 0.23 0.00 Dec 29 2006 Jan 15 2007 0.23 0.23 0.00
------------------------------------- TOTAL 2.76 2.76 0.00
-------------------------------------
------------------------------------- Distribution of Common Shares
and Warrants of TriStar Oil & Gas Ltd to
----------------------------------------------------------------------
Former Unitholders of Acclaim Energy Trust and StarPoint Energy
Trust
---------------------------------------------------------------------
On January 5, 2006 each Acclaim unitholder received a distribution
in-kind consisting of 0.0833 common shares of TriStar Oil & Gas
Ltd. ("TriStar") and 0.0175 TriStar warrants (the "TriStar
distribution"). On January 5, 2006, each StarPoint unitholder
received a distribution in-kind consisting of 0.1000 common shares
of TriStar and 0.0210 TriStar warrants (also the "TriStar
distribution"). As noted on page 68 of the Joint Information
Circular with respect to the Plan of Arrangement involving Acclaim
and StarPoint of November 18, 2005, for Unitholders resident in
Canada, any portion of this distribution that represents an
allocation of the income of each respective trust will be included
in the income of the Unitholder. The amount in excess of the
distribution of income will be considered a capital distribution
and accordingly, reduce the ACB of the applicable Units. Canetic
has determined that the TriStar distribution received by Canadian
resident unitholders is a 100% tax-deferred return of capital. In
Management's opinion, the appropriate value to ascribe to the
distribution of a TriStar Common Share is $2.75 per TriStar Common
Share representing TriStar's net asset value at the time of
distribution and the appropriate value to ascribe to the
distribution of the TriStar Warrants is $0.00 per TriStar Warrant,
representing the difference between the exercise price and the fair
market value of TriStar Common Shares on the date of warrant issue.
This value is Management's estimate and is not binding on Acclaim,
StarPoint, Canetic, Unitholders or the CRA and, accordingly, the
CRA may challenge such value. Since the entire amount of the
TriStar distribution is a return of capital the ACB of the Units
must be reduced by the amount of the TriStar distribution prior to
the disposition of the Units under the Arrangement. On a per unit
basis the TriStar distribution will equate to $0.229 for each
Acclaim unit held (0.0833 x $ 2.75) and $0.275 for each StarPoint
unit held (0.100 x $ 2.75), as outlined below. These values should
appear in box 42 of your T3 supplementary slip. 2006 Summary of
Acclaim TriStar Distribution
-------------------------------------------- The table below
summarizes, on a per unit basis, the taxability of the Acclaim
TriStar distribution as it should appear in Box 42 in the 2006 "T3
Supplementary" slip: 2006 ACCLAIM DISTRIBUTION (IN-KIND) FOR
CANADIAN UNITHOLDERS ($/UNIT)
---------------------------------------------------------------------
Return of Taxable Capital Record and Value / Amount Amount
Distribution Acclaim (0%) (100%) Distribution Date Unit ($CDN)
($CDN)
---------------------------------------------------------------------
TriStar Common Shares Jan 5, 2006 0.229 0.000 0.229 TriStar
Warrants Jan 5, 2006 0.000 0.000 0.000
------------------------------------- TOTAL 0.229 0.000 0.229
-------------------------------------
------------------------------------- 2006 Summary of StarPoint
TriStar Distribution ----------------------------------------------
The table below summarizes, on a per unit basis, the taxability of
the StarPoint TriStar distribution as it should appear in Box 42 in
the 2006 "T3 Supplementary" slip: 2006 STARPOINT DISTRIBUTION
(IN-KIND) FOR CANADIAN UNITHOLDERS ($/UNIT)
---------------------------------------------------------------------
Return of Taxable Capital Record and Value / Amount Amount
Distribution StarPoint (0%) (100%) Distribution Date Unit ($CDN)
($CDN)
---------------------------------------------------------------------
TriStar Common Shares Jan 5, 2006 0.275 0.000 0.275 TriStar
Warrants Jan 5, 2006 0.000 0.000 0.000
------------------------------------- TOTAL 0.275 0.000 0.275
-------------------------------------
------------------------------------- Canetic is one of Canada's
largest oil and gas royalty trusts. Canetic trust units and
debentures are listed on the Toronto Stock Exchange under the
symbols CNE.UN, CNE.DB.A, CNE.DB.B, CNE.DB.C, CNE.DB.D, and
CNE.DB.E and the trust units are listed on the New York Stock
Exchange under the symbol CNE. DATASOURCE: Canetic Resources Trust
CONTACT: please see the website at http://www.canetictrust.com/ or
contact Canetic investor relations by email at: or toll free
telephone at 1-877-539-6300
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