Canadian Income Tax Information
Dividends paid on common shares are designated as eligible dividends for Canadian income tax purposes. If you have any questions regarding the taxation of eligible dividends, please contact your Canadian tax advisor or your local office of the Canada Revenue Agency.
There was no return of capital portion with respect to our dividends for Canadian tax purposes in 2014. Taxation information is available from your broker or other intermediary.
Non-Resident Tax Information
Shareholders who are not residents of Canada for income tax purposes are encouraged to seek advice from a qualified tax advisor in their country of residence regarding the tax treatment of dividends.
Non-Resident Withholding Tax
Dividends paid or payable to non-residents of Canada are subject, on the date of payment, to a withholding tax of 25%, as prescribed by the Income Tax Act (Canada). This withholding tax may be reduced in accordance with reciprocal tax treaties. In the cast of the Tax Treaty between Canada and the U.S., the withholding tax for U.S. residents is prescribed at 15%.
The majority of Freehold's revenue is derived from non-operated royalty interests. Based on the nature of our assets, our dividends are not "qualified dividends" for U.S. tax purposes.
In consultation with its U.S. tax advisors, Freehold believes that it should be classified as a passive foreign investment company ("PFIC") under U.S. federal income tax principles. As such, dividends are subject to the provisions of U.S. federal income taxation applicable to PFICs.
For further tax information contact:
Vice-President, Finance & C.F.O.
Freehold Royalty Trust
Please see Freehold Royalty Trust Archives for historical tax information.