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Tax Q & A
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Investor Q&A
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Distribution History
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EIF Historical Tax Information
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Fair Market Value (FMV)
Enbridge Income Fund
Closing Price Dec 16/2010 $17.66
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Fund Restructuring Facts
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Canadian income trusts will become subject to taxation on January 1, 2011. In response to the proposed tax changes, Enbridge Income Fund Board announced approval to restructure the Fund as described in the Plan of Arrangement on May 3, 2010. The new structure is expected to maintain an investor value proposition similar to that of the Fund – providing a safe and dependable high cash payout to its investors – while providing the necessary financial flexibility and access to capital that will most effectively allow the Fund to grow in the future.
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The proposed restructuring under the Arrangement will involve the exchange of all publicly held trust units, which collectively represent a 28% economic interest in the Fund, as well as a portion of the Enbridge Inc. ("Enbridge") interest in the Fund, for shares of a taxable Canadian corporation to be called Enbridge Income Fund Holdings Inc. (EIFH). The scope of activities of EIFH would be limited to investment in the Fund and Enbridge would manage the business of EIFH, in addition to continuing in its current roles as administrator of the Fund and manager of ECT.
On completion of the Arrangement, public unitholders would retain their current proportionate economic interest in the Fund, held indirectly through EIFH. The Fund would cease to be a specified investment flow-through (SIFT) trust under Canadian tax rules and would not be subject to the SIFT tax scheduled to take effect in 2011, although both EIFH and Enbridge Inc. would be subject to corporate income tax on taxable income received from the Fund. Dividends paid by EIFH are expected to be eligible dividends which qualify for the enhanced federal dividend tax credit. Public unitholders would have a choice either to effect the exchange on a tax-deferred basis (by making a joint tax election with EIFH) if they have embedded capital gains on their units, or to realize any embedded gain or loss
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