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Gold/Mining/Energy : Oil Sands and Related Stocks

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From: lzc	10/31/2006 7:17:23 PM
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Flaherty imposes new tax on income trusts Last Updated: Tuesday, October 31, 2006 \| 6:06 PM ET CBC News Finance Minister Jim Flaherty has announced a new tax on income trust distributions in a bid to stem the growing number of companies that are converting to income trusts. In a hastily called news conference Tuesday afternoon, Flaherty said $70 billion of new trust conversions have taken place so far this year - something he said is hurting the economy. He called trust conversion "a growing trend to corporate tax avoidance." Flaherty's announcement comes three weeks after BCE proposed the biggest trust conversion in Canadian history. It proposed to convert its Bell Canada subsidiary to a trust — a move that would save it $800 million in tax by 2008. Trust conversions are increasing in popularity because trusts do not pay corporate tax. Instead, they pay out most of their income in distributions to unitholders, who then pay tax on those distributions at a preferential rate. Flaherty said trusts that begin trading as of Wednesday would face the new measures in 2007. Existing trusts would have a four-year transition period and would not face the new rules until 2011. cbc.ca Anyone know if this will apply to energy trusts? Unfortunately, some people will sell first and get answers later.

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