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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.
S-58
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
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