The following information on the joint tax election is provided for historical purposes. Please note that the Tax Election Website has closed.
Brookfield Renewable Energy Partners – Joint Tax Election Information
On September 13, 2011, the Brookfield Renewable Power Fund (“Fund
”) announced a plan of arrangement to combine its assets with the power generating assets of Brookfield Renewable Power Inc.
to create Brookfield Renewable Energy Partners L.P.
”), a global, publicly-traded partnership focused on renewable power generation. The transaction was completed in November 2011, at which time Fund shareholders received one limited partnership share of Brookfield Renewable for every Fund share held.
Tax Implications for Canadian Resident Shareholders
The exchange of Fund shares for Brookfield Renewable shares is a taxable transaction for Canadian income tax purposes. However, you may defer the gain for Canadian income tax purposes by completing a joint tax election (“Tax Election”) with Brookfield Renewable which must then be filed with the Canada Revenue Agency.
You should consider making the Tax Election if:
a) You are a Canadian resident; and
b) Your shares are not held in a non-taxable account such as an RRSP, RRIF, RESP or TFSA; and
c) You would have a taxable gain without filing the election; and
d) You can file your Tax Election before the election due date or late file and pay the late filing penalty.
In general, in the case of a transaction that occurred in calendar 2011 such as ours, the filing due date for a joint tax election would normally be the earlier of the filing date for either party’s 2011 tax return which for an individual taxpayer would be April 30, 2012; however, for this transaction it is not entirely clear. To ensure a tax election is valid and to minimize the potential for any late filing penalties (generally assessed at $100 per month), we recommend that all shareholders file a completed Tax Election with the CRA on or before March 14, 2012. Shareholders should consult with their own tax advisor as to the appropriate filing deadline.
If your shares are held in a non-taxable registered account, such as an RRSP, RRIF, RESP or TFSA, you do not need to complete a Tax Election.
You should refer to the Information Circular
for additional details and seek the independent advice of your legal, tax and financial advisors regarding your individual circumstances.
Tax Election Website and Process
We have launched a website to facilitate the filing of tax elections (“Tax Election Website”). In order to make a Tax Election, an eligible shareholder must use this website.
You will be required to create an account (Access ID) and to submit the following information:
3. Social Insurance Number
4. Tax Centre (where you send your tax return)
5. Number of Fund shares exchanged
6. Adjusted Cost Base of Fund shares exchanged
Each investor is responsible for the computation of the adjusted cost base of their Fund shares. Brookfield Renewable cannot compute or verify the accuracy the adjusted cost base. The computation of the adjusted cost base of a Fund share is different and more complicated then computing the adjusted cost base of shares of a corporation. In general, the adjusted cost base of Fund shares will be the sum of (i) the amount paid to acquire the Fund shares and (ii) the cumulative annual taxable income allocation for the Fund shares (reported on T3 Forms previously distributed by the Fund), minus the cumulative cash distributions paid on the Fund shares. The file on the right side of this page contains historical information about the annual taxable income calculations and cash distributions which may be helpful in computing the adjusted cost base of Fund shares.
Input of Information
Upon the successful submission of information, a unique identification number will be provided, which will be required for identification purposes in the event that you wish to contact Brookfield Renewable in regard to a previously submitted Tax Election information.
Submissions containing all required information will be processed and a Tax Election form signed by Brookfield Renewable and an electronic copy of the completed Tax Election will be sent by e-mail to the e-mail address provided to us at the time of submission.
Filing of the Tax Election Form by the Shareholder
To complete the Tax Election filing process, the shareholder will then be required to sign two copies of the completed Tax Election form (received electronically from BREP) and to file one copy with the CRA (and the applicable provincial income tax authority) and to retain one copy for the shareholder’s records.
The Tax Election Website will not accept submissions later than 5:00 pm (Toronto time) on September 30, 2012 (the “Tax Election Deadline”), although a shareholder will need to provide the information earlier depending on their taxation year-end and filing deadline.
Execution of Tax Election Forms
In order to make a Tax Election, the applicable Tax Election form must be signed, timely filed and properly completed with the necessary information, including the number of Fund shares transferred.
Brookfield Renewable will execute any Tax Election form for which complete and correct information has been submitted to it by an eligible shareholder in the time and manner specified. Brookfield Renewable will send an electronic copy of the election form by e-mail to the eligible shareholder at the e-mail address provided. Brookfield Renewable is not required to execute Tax Election forms where the Tax Election information is incomplete.
Brookfield Renewable will not execute any Tax Election form that does not appear to comply with the provisions of the Tax Act (or any applicable provincial income tax law).
Deadline for Submitting Tax Election Information to Brookfield Renewable
Brookfield Renewable will make a Tax Election only with an eligible shareholder that has provided complete and proper information to Brookfield Renewable as required through the Tax Election Website before it closes on September 30, 2012.
If your Tax Election information is not received by Brookfield Renewable through the Tax Election Website before it closes and in accordance with the procedures set out on this page, then you cannot be assured of benefiting from the tax-deferred “rollover” provisions of the Tax Act (or the corresponding provisions of any applicable provincial tax legislation).
Each shareholder is solely responsible for complying with all applicable requirements relating to the filing of the Tax Election form, and for the payment of any late filing penalty. Brookfield Renewable and its representatives and agents will not be responsible for the proper completion and filing of any election, and will not be responsible or liable for any taxes, interest, penalties, damages or expenses resulting from the failure by anyone to deliver any election in accordance with the procedures set out on the Tax Election Website, to properly complete any election or to properly file it within the time prescribed and in the form prescribed under the Tax Act (or the corresponding provisions of any applicable provincial or territorial tax legislation).
In order to achieve a deferral of income tax in the Province of Québec similar to that resulting from the Tax Election for Canadian federal income tax purposes, it is necessary to file an additional Tax Election form with the taxing authority of Quebec (a “Provincial Tax Election”). Brookfield Renewable will execute a Provincial Tax Election with an eligible shareholder under the same conditions for which it is willing to make the Tax Election. Eligible shareholders are entirely responsible for determining whether a Provincial Tax Election is applicable and appropriate in their circumstances and (if so) obtaining and submitting the related Provincial Tax Election information to Brookfield Renewable.
Delivery and Filing of the Completed Tax Election Form
Each eligible shareholder is solely responsible for ensuring that the Tax Election form is completed correctly and filed with the CRA (and any applicable provincial tax authorities) by the applicable filing deadline and is solely responsible for complying with all applicable requirements relating to the making and filing of the Tax Election form, and for the payment of any late filing penalty. The shareholder should review the Tax Election form to ensure they agree with the content, calculations and other disclosures.
Brookfield Renewable and its representatives and agents will not be responsible for the proper completion and filing of any election, and will not be responsible or liable for any taxes, interest, penalties, damages or expenses resulting from the failure by anyone to deliver any election in accordance with the procedures set out in this Tax Election Website, to properly complete any election or to properly file it within the time prescribed and in the form prescribed under the Tax Act (or the corresponding provisions of any applicable provincial or territorial tax legislation).