TSX Symbol: CIX.UN
TORONTO, Dec. 10 /CNW/ - CI Financial Income Fund (the "Fund") (TSX:
CIX.UN) is alerting its securityholders to an announcement made on November
28, 2008 by the Department of Finance (Canada) ("Finance") that could have
relevance to the income tax considerations of the proposed conversion of the
Fund to a corporation.
Finance released draft amendments (the "New Proposals") to the SIFT
Conversion Proposals, including the proposed "automatic rollover" provision
under the Income Tax Act (Canada) (the "Tax Act") that applies where units of
a SIFT trust or SIFT partnership are exchanged solely for shares of a
corporation (the "Exchange Rule"). As a result of the New Proposals, certain
Canadian federal income tax considerations applicable to Fund Unitholders (and
possibly Exchangeable LP Unitholders) in respect of the previously announced
proposed conversion of the Fund from an income trust into a corporation, CI
Financial Corp. ("CI Corp."), will be different than those described in the
management information circular of the Fund dated November 20, 2008 (the
"Information Circular"). The summary provided below generally addresses the
impact of the New Proposals. All capitalized terms not defined herein shall
have the meanings set forth in the Information Circular.Certain Canadian Federal Income Tax Considerations
Section 85 ElectionPursuant to the New Proposals, an election may now be made in respect of
a transfer of Fund Units to CI Corp. pursuant to Subsections 85(1) and 85(2)
of the Tax Act, in which case the automatic rollover provisions of the Tax Act
would not apply.
CI Corp. will execute a Section 85 election with an Eligible Fund
Unitholder provided that CI Corp. receives two signed copies of the necessary
tax election forms within 60 days following the Effective Date, duly completed
with the number of Fund Units transferred and the applicable elected amount
for the purposes of the election.
CI Corp. is not, and should not be construed as, providing advice to any
particular Eligible Fund Unitholder as to whether making such an election is
advisable in the Eligible Fund Unitholder's particular circumstances. Eligible
Fund Unitholders wishing to make the election(s) should consult their own tax
advisors.
CI Corp. will continue to execute elections under Section 85 of the Tax
Act in the other circumstances contemplated in the Information Circular. It is
expected that CI Corp.'s website will contain information for Fund Unitholders
to assist in this process.
Exchange Rule
Pursuant to the New Proposals, if the Fund Unitholder has not made a
Section 85 election (as described above) and is therefore entitled to an
automatic rollover, there may be tax consequences in the event that the fair
market value of a CI Corp. Common Share immediately after the exchange is
different than the fair market value of a Fund Unit at the time of the
exchange.
Stop Loss
As a result of the New Proposals, a capital loss otherwise realized by a
Fund Unitholder, and possibly an Exchangeable LP Unitholder, that is a
corporation, trust or partnership (an "Affected Holder") potentially will be
subject to a stop loss rule in the Tax Act. If the stop loss rule applies, the
capital loss otherwise realized by an Affected Holder is denied and may only
be recognized on the occurrence of certain specific triggering events
enumerated in the Tax Act. The stop loss rule is complex and Affected Holders
should consult with their own tax advisors regarding the application of the
New Proposals to the Arrangement having regard to their own particular
circumstances.
CI Financial Income Fund (TSX: CIX.UN) is an independent, Canadian-owned
wealth management company with approximately $78.9 billion in fee-earning
assets as of November 30, 2008. CI offers a broad range of investment products
and services, including an industry-leading selection of investment funds, and
is on the Web at www.ci.com/cix.
This press release contains forward-looking statements with respect to CI
and its products and services, including its business operations and strategy
and financial performance and condition. Although management believes that the
expectations reflected in such forward-looking statements are reasonable, such
statements involve risks and uncertainties. Actual results may differ
materially from those expressed or implied by such forward-looking statements.
Factors that could cause actual results to differ materially from expectations
include, among other things, general economic and market factors, including
interest rates, business competition, changes in government regulations or in
tax laws, and other factors discussed in materials filed with applicable
securities regulatory authorities from time to time.
For further information: Investor Relations, CI Financial, (416)
364-1145
