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Motley Fool Global Gains / GGV: Canada & Bermuda


Subject:  Re: Canadien Eateries Date:  11/1/2006  2:13 PM
Author:  Steve819 Number:  10 of 29

I'll admit, I'm not that familar with income trusts and how they work.

As I understand it, today's annoucement means that all income trusts will be taxed as corporations, and the tax benenfits for using this type of corporate structure are eliminated. This is scaled in for current trusts, with full taxation occuring in a few years. This is obviously a huge negative for all income trusts, and they are down quite a bit across the board in response.

I've been looking, but I can't find out exactly what the impact will be on these trusts - ie. income tax rates are x%, and will move to x% in a few years. Does anyone know anything about that? It will be interesting to see what the trusts do in response - perhaps there is another loophole that will be exploited going forward. I saw something over on the Canada board on about the U.S divvy