VANCOUVER, BRITISH COLUMBIA - (Marketwire) - The Trustees of Boston Pizza Royalties Income Fund (the "Fund") (TSX:BPF.UN) announced their intention for the Fund to maintain its current income trust structure beyond January 1, 2011 when legislative changes to the tax treatment of income trusts, commonly referred to as Specified Investment Flow Through tax (the "SIFT Tax"), become effective.
The Trustees of the Fund have examined all alternatives available to the Fund to maximize unitholder value in the face of the implementation of the SIFT Tax and believe that the Fund remaining a trust is in the best interest of unitholdes and the business for the following reasons:
"The Fund's announcement concerning its plan to maintain the current income trust structure beyond 2010 is the best approach for us to take in the context of the new taxation environment," said John Cowperthwaite, Chairman of the Board of Trustees. "Since going public in 2002, the Fund has performed well as a top line income trust increasing annualized distributions from $1.00 to $1.38 per unit over that time while consistently meeting its financial objective of delivering stable and growing distributions to unitholders."
Under the SIFT Tax legislation, which was substantively enacted into law on June 12, 2007, the Fund will be subject to a tax at the prevailing corporate rate beginning on January 1, 2011. The SIFT Tax rate is 26.5% for 2011 and 25% for 2012 and later taxation years. Monthly cash distributions to unitholders will be reclassified for tax purposes as eligible dividends and Canadian residents who hold their units in a non-tax deferred account may claim the dividend tax credit for eligible dividends, thereby reducing the after-tax impact of this legislative change.
Forward-looking information in this press release includes, but is not limited to, such things as:
The forward-looking information disclosed herein is based on a number of assumptions including, among other things:
This forward-looking information involves a number of risks, uncertainties and future expectations including, but not limited to:
The foregoing list of factors is not exhaustive and should be considered in conjunction with the risks and uncertainties set out in "Risks & Uncertainties" section of the Fund's management's discussion and analysis for the three month and six month periods ended June 30, 2010. This press release discusses some of the factors that could cause actual results to differ materially from those expressed in or underlying such forward-looking information.
Forward-looking information is provided as of the date hereof and, except as required by law, we assume no obligation to update or revise forward-looking information to reflect new events or circumstances.
The Trustees of the Fund have approved the contents of this press release.