This excerpt taken from the NGD 6-K filed Apr 20, 2009.
Non-Resident Dissenter”) and consequently is paid the fair value for the Non-Resident Dissenter’s Western Shares by New Gold will be considered to realize a capital gain or capital loss as discussed above under “Holders Resident in Canada — Dissenting Resident Holders”. As discussed above under “Holders Not Resident in Canada Exchange of Western Shares under the Arrangement and Subsequent Dispositions of New Gold Shares”, any resulting capital gain would only be subject to tax under the Tax Act if the Western Shares are taxable Canadian property to the Non-Resident Holder at the Effective Time and are not treaty-protected property of the Non-Resident Holder at that time.
An amount paid in respect of interest awarded by the Court to a Non-Resident Dissenter will not be subject to Canadian withholding tax.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
ANY DISCUSSION OF U.S. FEDERAL INCOME TAX ISSUES SET FORTH IN THIS SUPPLEMENT WAS WRITTEN IN CONNECTION WITH THE PROMOTION AND MARKETING OF THE TRANSACTIONS DESCRIBED IN THIS SUPPLEMENT. SUCH DISCUSSION WAS NOT INTENDED OR WRITTEN TO BE USED, AND IT CANNOT BE USED, BY ANY PERSON FOR THE PURPOSE OF AVOIDING ANY U.S. FEDERAL TAX PENALTIES THAT MAY BE IMPOSED ON ANY PERSON. EACH WESTERN SHAREHOLDER AND HOLDER OF WESTERN OPTIONS SHOULD SEEK ADVICE BASED ON ITS PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.
The following summary describes certain U.S. federal income tax consequences to (i) U.S. Holders and Non-U.S. Holders (both as defined below) of Western Shares and Western Options that will exchange or exercise their Western Options pursuant to the Arrangement; (ii) Non-U.S. Holders who will exchange shares of a Qualifying Holdco for New Gold Shares and cash pursuant to the Holdco Alternative as described in “The Arrangement – Holdco Alternative”; (iii) U.S. Holders and Non-U.S. Holders of Western Shares that exercise their right to dissent in accordance with the dissent procedures set forth under “Dissent Rights of Western Shareholders”; and (iv) U.S. Holders and Non-U.S. Holders that will own New Gold Shares following the Arrangement. This discussion is for general information only and does not address all U.S. federal income tax matters that may be relevant to a particular Western Shareholder or holder of Western Options in light of its particular circumstances, and it does not address any state, local, non-U.S., or alternative minimum tax consequences of the Arrangement or of the ownership and disposition of New Gold Shares.
For purposes of this summary, a U.S. Holder is a beneficial owner of Western Shares, Western Options or New Gold Shares following the Arrangement that is a U.S. person. A U.S. person is (i) an individual who is a citizen or resident of the United States for U.S. federal income tax purposes; (ii) a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any U.S. state, or the District of Columbia; (iii) an estate the income of which is subject to U.S. federal income tax regardless of its source; or (iv) a trust (a) if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (b) that has validly elected to be treated as a U.S. person under applicable U.S. Treasury Regulations.
A Non-U.S. Holder is a beneficial owner of Western Shares, Western Options or New Gold Shares following the Arrangement that is not a U.S. person and is not a partnership or other entity treated as a partnership for U.S. federal income tax purposes.
If a partnership or other entity treated as a partnership for U.S. federal income tax purposes holds Western Shares or New Gold Shares following the Arrangement, the tax treatment of a partner or member will generally depend upon the status of the partner and the activities of the partnership or other entity. Partners of partnerships or members of other entities treated as partnerships that hold Western Shares or New Gold Shares should consult with their own tax advisors to determine the U.S. federal, state, local, and other tax consequences that may be relevant to them.
This summary is based on the U.S. Internal Revenue Code of 1986, as amended (the “