Income Trusts Renaissance

Lexpert notes with mixed reactions, this morning’s Globe and Mail article announcing a renaissance of income trusts – this time with the emphasis on foreign assets: While we are enthused about these entrepreneurial opportunities, if the trend continues we may need to re-consider a past decision on our part with respect to the Lexpert Surveys. For a year or two following the 2006 income tax rule change, Lexpert continued to survey in Income Trusts – lawyers told us they were working on the remaining ones. But that fizzled out and the community feedback was to abandon this as a practice area to survey. What to do if they come back?

According to the Globe article, “Nearly six years after Ottawa introduced tax rules that effectively ended the rise of income trusts, a new breed of entrepreneurs is returning to the model, stuffing foreign assets into trusts that generate fat dividends and avoid Canadian corporate taxes”.

“The trend started in late 2010, when Eagle Energy Trust went public as the first new energy trust to appear following the 2006 rule change. A second, Parallel Energy Trust followed last year. Now a third, called Argent Energy Trust, has filed a prospectus and is looking to raise $325-million to go public in coming months.

“But it’s not just the energy sector. New trusts are being formed to snap up real estate, wind farms and natural gas distribution networks in the U.S., Europe and Asia.

“‘Really, I see this whole thing as a beautiful example of international capital markets integration,’ said Bob McCue, who leads Bennett Jones LLP’s tax dispute resolution practice. He has, with Mr. Lee, been among the leaders in establishing the new trust model.”

See Globe article at

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: