Tax Information
It is expected that Parkland’s dividends will qualify as “eligible dividends” for Canadian income tax purposes, and thus qualify for the gross-up and dividend tax credit regime for Canadian shareholders who receive dividends outside of a tax deferred account.
After Tax Cash Flow Analysis
The following analysis illustrates the impact of conversion on the after-tax cash flow for an individual investor in Ontario:
| Year |
Fund |
Note |
Corporation |
Note |
| Annual Distribution/Dividend |
$1.26 |
|
$1.02 |
|
| Individual Income Tax (1) |
46.4% |
(2) |
26.6% |
(3) |
| Individual Income Taxes Payable |
($0.58) |
|
($0.27) |
|
| After-Tax Cash Flow to Individual |
$0.68 |
|
$0.75 |
|
| % Increase |
|
|
10% |
|
Notes
- Applies to individuals residing in Ontario with taxable income greater than $127,000 in 2010.
- Combined Federal-Provincial tax rates for 2010 for Ontario resident individuals receiving distributions on income fund units.
- Combined Federal-Provincial tax rates for 2010 for qualifying Ontario resident individuals receiving eligible dividends on common shares of a corporation.
The above information is presented for the purpose of comparing cash flows to investors following conversion of the Fund to the Corporation and is not intended to be, and should not be construed to be, legal or tax advice to any Shareholder of the Corporation. Shareholders should obtain independent advice regarding the income tax consequences of their investment.