Sound Energy Trust provides 2006 Canadian and U.S. tax information



    TSX: SND.UN

    CALGARY, March 23 /CNW/ - Sound Energy Trust ("Sound" or the "Trust") is
pleased to provide information on the taxability of its 2006 distributions to
both Canadian and U.S. Unitholders:

    Canadian Individual Unitholders
    -------------------------------

    The Trust has determined that for Canadian Unitholders, distributions
declared in 2006, other than the special distribution described below, are 100
percent taxable.
    Sound qualifies as a mutual fund trust under the Income Tax Act (Canada)
and as such, Trust units of Sound are qualified investments for Registered
Retirement Savings Plans ("RRSPs"), Registered Retirement Income Funds
("RRIFs"), Registered Education Savings Plans ("RESPs"), and Deferred Profit
Sharing Plans ("DPSPs"). Unitholders who hold their investment in a RRSP,
RRIF, RESP, or DPSP need not report any income related to Trust unit
distributions on their 2006 income tax return.
    A T3 Supplementary Form, in which the taxable income portion of the
distributions is reported, will be mailed to all other Unitholders before
March 31, 2006. Registered Unitholders will receive their T3 Supplementary
Form from the Trust's transfer agent, Computershare Trust Company of Canada.
Beneficial Unitholders will receive their T3 slip from their broker or other
intermediary.
    During 2006, Sound's distributions, other than the special distribution,
totaled $1.20 per Trust unit. The following table sets out the tax treatment
of the Canadian 2006 monthly distributions:

    
                                                                     Taxable
     Record           Payment           Total      Tax-Deferred       Amount
      Date              Date        Distribution      Amount         (Income)
    -------------------------------------------------------------------------
    Jan 31/06         Feb 15/06         $0.10          $0.00           $0.10
    Feb 28/06         Mar 15/06         $0.10          $0.00           $0.10
    Mar 31/06         Apr 17/06         $0.10          $0.00           $0.10
    Apr 28/06         May 15/06         $0.10          $0.00           $0.10
    May 31/06         Jun 15/06         $0.10          $0.00           $0.10
    Jun 30/06         Jul 14/06         $0.10          $0.00           $0.10
    Jul 31/06         Aug 15/06         $0.10          $0.00           $0.10
    Aug 31/06         Sep 15/06         $0.10          $0.00           $0.10
    Sep 29/06         Oct 16/06         $0.10          $0.00           $0.10
    Oct 31/06         Nov 15/06         $0.10          $0.00           $0.10
    Nov 30/06         Dec 15/06         $0.10          $0.00           $0.10
    Dec 31/06         Jan 15/07         $0.10          $0.00           $0.10
    -------------------------------------------------------------------------
        Total                           $1.20          $0.00           $1.20
    

    Distribution of Sure Energy Inc. ("Sure") Shares to NAV Energy Trust
    ("NAV") Unitholders of Record on August 14, 2006

    On August 14, 2006, as a result of the Plan of Arrangement between NAV
and Clear Energy Inc. to form Sound Energy Trust, the shares of Sure were
distributed to Unitholders. This spin-out resulted in a special distribution
by NAV in the form of 0.3333 shares of Sure for each NAV (now Sound) Trust
unit held and a dividend in kind to the Navigo Exchangeable Shareholders (the
"Exchangeable Shareholders"). The fair market value of each Sure Share
received by NAV Unitholders and Exchangeable Shareholders was determined to be
$0.7907. This amount is the adjusted cost base of each Sure Share received
under the plan.
    The special distribution of Sure Shares to NAV Unitholders was effected
by way of a return of capital. The adjusted cost base of NAV Unitholders'
Trust units held is reduced by an amount equal to the fair market value of the
Sure Shares received on the special distribution.
    The distribution of Sure Shares to the Exchangeable Shareholders was
effected by way of a dividend. Each Exchangeable Shareholder, on the basis of
receiving 0.3333 of a Sure Share for each Exchangeable Share, effectively
received a dividend equal to $0.7907 per Exchangeable Share. Exchangeable
Shareholders will receive a 2006 T5 slip reporting this dividend.

    United States Individual Unitholders
    ------------------------------------

    According to U.S. tax advisors, Sound should be treated as a corporation
and its units as equity under the U.S. tax law. For Unitholders residing in
the United States, taxability of distributions is calculated using U.S. tax
rules. The taxable portion of the monthly distribution is determined annually
by the Trust based upon current and accumulated earnings and profits in
accordance with U.S. tax law. As a result, Sound's distributions paid during
2006 are considered dividends and should be considered a qualified dividend
for U.S. federal income tax purposes.
    For 2006, dividends received by U.S. Unitholders are 64.88 percent
taxable and 35.12 percent return of capital (tax-deferred). The return of
capital portion of the distributions will reduce the adjusted tax basis of
your Sound Energy Trust units. If the amount of "Non-Taxable Return of
Capital" exceeds your adjusted tax basis, report the excess as capital gain.
The following table summarizes the taxability of monthly cash distributions
paid on a per-unit basis:

    

     Record           Payment           Total      Tax-Deferred      Taxable
      Date              Date        Distribution     Amount(1)      Amount(1)
    -------------------------------------------------------------------------
    Dec 31/05         Jan 15/06         $0.10        $0.03512       $0.06488
    Jan 31/06         Feb 15/06         $0.10        $0.03512       $0.06488
    Feb 28/06         Mar 15/06         $0.10        $0.03512       $0.06488
    Mar 31/06         Apr 17/06         $0.10        $0.03512       $0.06488
    Apr 28/06         May 15/06         $0.10        $0.03512       $0.06488
    May 31/06         Jun 15/06         $0.10        $0.03512       $0.06488
    Jun 30/06         Jul 14/06         $0.10        $0.03512       $0.06488
    Jul 31/06         Aug 15/06         $0.10        $0.03512       $0.06488
    Aug 31/06         Sep 15/06         $0.10        $0.03512       $0.06488
    Sep 29/06         Oct 16/06         $0.10        $0.03512       $0.06488
    Oct 31/06         Nov 15/06         $0.10        $0.03512       $0.06488
    Nov 30/06         Dec 15/06         $0.10        $0.03512       $0.06488
    -------------------------------------------------------------------------
        Total                           $1.20        $0.42144       $0.77856
    -------------------------------------------------------------------------
    (1) Canadian dollars per unit
    

    There should be no amount required to be reported on Internal Revenue
Service Form 1040 where Sound units are held in a Qualified Retirement Plan.
    Sound Energy Trust is not required to issue Form 1099-DIV; however, U.S.
Unitholders may have previously received a Form 1099-DIV from a broker or
intermediary that may not be correct. As a result of this, U.S. Unitholders
should consult their brokers and tax advisors to ensure that this information
is accurately reflected on their tax returns. Brokers and/or intermediaries
may or may not be required to issue amended Form 1099-DIV.

    Summary
    -------

    The information in this news release is not meant to be an exhaustive
discussion of all possible income tax considerations, but a general guideline,
and is not intended to be legal or tax advice to any particular holder or
potential holder of Sound Trust units. Holders or potential holders of Trust
units should consult their own income tax advisors as to the particular income
tax consequences of holding the Trust units.
    Unitholders who are not residents of Canada for income tax purposes are
encouraged to seek advice from a qualified tax advisor in the country of their
residence for the tax treatment of distributions. Monthly distributions
payable to non-residents of Canada are normally subject to a withholding tax
of 25 percent as prescribed by the Income Tax Act (Canada). This withholding
tax may be reduced in accordance with reciprocal tax treaties, and in the case
of the Tax Treaty between Canada and the United States, the withholding tax
for residents of the United States is prescribed at 15 percent. U.S. taxpayers
may be eligible for a foreign tax credit with respect to the Canadian
withholding taxes paid. Information regarding the amount of Canadian tax
withheld in 2006 should be available through your broker or other intermediary
and is not provided by Sound.

    Sound is a Calgary-based, open-end oil and gas income trust whose Trust
units trade on the Toronto Stock Exchange (the "TSX") under the symbol SND.UN.
Debentures of Sound trade on the TSX under the symbols SND.DB and SND.DB.A.

    ADVISORY: Certain information regarding Sound Energy Trust including
management's assessment of future plans and operations, may constitute
forward-looking statements under applicable securities law and necessarily
involve risks associated with oil and gas exploration, production, marketing
and transportation such as loss of market, volatility of prices, currency
fluctuations, imprecision of reserve estimates, environmental risks,
competition from other producers and ability to access sufficient capital from
internal and external sources; as a consequence, actual results may differ
materially from those anticipated in the forward-looking statements.

    %SEDAR: 00020262E




For further information:

For further information: Anne-Marie Buchmuller, Manager, Investor
Relations, Phone: (403) 218-3664, Cell: (403) 472-0053, Toll-free:
1-888-414-4144, Email: investorrelations@soundenergytrust.com,
www.soundenergytrust.com

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