Newalta Inc. Advises on 2008 Canadian Income Tax Information for Newalta Income Fund



    TSX Trading Symbol: NAL

    CALGARY, Feb. 20 /CNW/ - Pursuant to a plan of arrangement involving,
among others, Newalta Income Fund, holders of trust units of Newalta Income
Fund exchanged their trust units for common shares of Newalta Inc. on December
31, 2008 (the "Conversion"). The following information is intended to assist
former holders of trust units of Newalta Income Fund in the preparation of
their 2008 Income Tax Return.
    The information contained herein is based on Newalta's understanding of
the Income Tax Act (Canada) (the "Tax Act") and the regulations thereunder and
is provided for general information only. Former holders are advised to
consult their personal tax advisors with respect to their particular
circumstances.

    Trust Units held within an RRSP, RRIF, RESP or DPSP

    No amounts are required to be reported on the 2008 T1 Income Tax Return
where trust units of Newalta Income Fund were held within an RRSP, RRIF, RESP
or DPSP.

    Trust Units held outside of an RRSP, RRIF, RESP or DPSP

    If you held trust units of Newalta Income Fund outside of an RRSP, RRIF,
RESP or DPSP, through a broker or other intermediary you will receive a T3
Supplementary Information slip directly from your broker or intermediary, not
from the transfer agent or Newalta.
    Former registered holders of trust units of Newalta Income Fund who did
not hold their trust units through a broker or intermediary will receive a T3
Supplementary Information slip directly from Valiant Trust Company.
    The attached "Schedule 1" includes supplementary information on the
Canadian tax characterization of the 2008 distributions declared and is shown
on a per unit basis. Under Paragraph 12(1)(m) of the Tax Act, the taxable
amount allocated by Newalta Fund in 2008 to the holders of trust units must be
reported by the holders in their 2008 Income Tax Return.
    Accordingly, the taxable amount of distributions (i.e., "Other Income"
Box (26) and "Dividend Income" Box (49) on the T3 Supplementary Information
slip) with respect to record dates from January 1, 2008 up to and including
December 31, 2008 are included in your T3 Supplementary Information.
    In accordance with subsection 89(14) of the Tax Act, the amounts
specified as dividend income in Schedule 1 will, by virtue of subsection
104(19) of the Tax Act, be an eligible dividend within the meaning of
subsection 89(1) of the Tax Act in respect of each trust unit.
    The deadline for mailing all T3 Supplementary Information slips as
required by the Canada Revenue Agency is March 31, 2009.

    Reduction to Adjusted Cost Base

    Former holders of trust units of Newalta Income Fund are required to
reduce the adjusted cost base of their trust units of Newalta Income Fund by
the return of capital amount. The adjusted cost base is used in calculating
capital gains or losses on the disposition of trust units of Newalta Income
Fund if the owner held the trust units of Newalta Income Fund as capital
property.
    A former individual holder of trust units who exchanged trust units of
Newalta Income Fund for common shares of Newalta Inc. as part of the
Conversion will, unless such holder makes a joint election with Newalta Inc.
under section 85 of the Tax Act, generally realize a capital gain (or capital
loss) equal to the amount by which the aggregate of the fair market value of
such common shares received is greater (or less) than the adjusted cost base
of the trust units so exchanged plus any reasonable costs incurred by such
holder in connection with the exchange. In these circumstances, the cost of
the common shares of Newalta Inc. acquired will be equal to their fair market
value. An eligible former holder of trust units may be able to defer all or a
portion of any capital gain which would otherwise result from the exchange by
making a joint election with Newalta Inc. under section 85 of the Tax Act. The
closing price of the trust units of Newalta Income Fund on December 31, 2008
(the date all trust units were exchanged for common shares of Newalta Inc.)
was $6.40. For a discussion regarding the treatment of capital gains and
losses, you should refer to the Management Information Circular of Newalta
Income Fund dated November 12, 2008 and the press release of Newalta Income
Fund dated December 3, 2008 titled "Newalta Income Fund Updates Unitholders On
Proposed Changes To Tax Legislation In Connection With Previously Announced
Conversion".

    
                                 Schedule 1

    Newalta Income Fund
    2008 - T3 Information for Canadian Residents

    The following table outlines the breakdown of distributions declared per
trust unit of Newalta Income Fund with respect to record dates for the period
January 1, 2008 up to and including December 31, 2008 for Canadian income tax
purposes.

    -------------------------------------------------------------------------
                                                     Other Dividend   Return
                                     Distribution   Income   Income       of
                                         Declared  (Box 26) (Box 49) Capital
                                           cents/   cents/   cents/   cents/
    Record Date        Payment Date          unit     unit     unit     unit
    -------------------------------------------------------------------------
    January 31, 2008   February 15, 2008     18.5   15.834    0.050    2.616
    -------------------------------------------------------------------------
    February 29, 2008  March 17, 2008        18.5   15.834    0.050    2.616
    -------------------------------------------------------------------------
    March 31, 2008     April 15, 2008        18.5   15.834    0.050    2.616
    -------------------------------------------------------------------------
    April 30, 2008     May 15, 2008          18.5   15.834    0.050    2.616
    -------------------------------------------------------------------------
    May 30, 2008       June 16, 2008         18.5   15.834    0.050    2.616
    -------------------------------------------------------------------------
    June 30, 2008      July 15, 2008         18.5   15.834    0.050    2.616
    -------------------------------------------------------------------------
    July 31, 2008      August 15, 2008       18.5   15.834    0.050    2.616
    -------------------------------------------------------------------------
    August 29, 2008    September 15, 2008    18.5   15.834    0.050    2.616
    -------------------------------------------------------------------------
    September 30, 2008 October 15, 2008      18.5   15.834    0.050    2.616
    -------------------------------------------------------------------------
    October 31, 2008   November 17, 2008     18.5   15.834    0.050    2.616
    -------------------------------------------------------------------------
    November 28, 2008  December 15, 2008     18.5   15.834    0.050    2.616
    -------------------------------------------------------------------------
    December 31, 2008  January 15, 2009      18.5   15.834    0.050    2.616
    -------------------------------------------------------------------------
    TOTAL CENTS PER UNIT                  222.000  190.008    0.600   31.392
    -------------------------------------------------------------------------
    

    Newalta Inc. is the largest Canadian industrial waste management and
environmental services provider and focuses on maximizing the value inherent
in industrial waste through the recovery of saleable products and recycling.
It also provides environmentally sound disposal of solid, non-hazardous
industrial waste. With talented people and a national network of facilities,
Newalta serves customers in the automotive, forestry, manufacturing, mining,
oil and gas, petrochemical, pulp and paper, steel and transportation service
industries. Providing solid investor returns, exceptional customer service,
safe operations and environmental stewardship has enabled Newalta to expand
into new service sectors and geographic markets. Newalta Inc. trades on the
TSX as NAL. For more information, visit www.newalta.com.





For further information:

For further information: Anne M. MacMicken, Executive Director, Investor
Relations, (403) 806-7019


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