Incitec Pivot Ltd T.IPL

RE:Question

[Oldfart74]

McRambus wrote:

There are 4 options to tender shares. Option 3 and 4 are for BIP.UN units and cash or all BIP.UN units. As I keep reading it says (bolded fonts) that if I hold the shares in a tax exepmt account (RRSP/TFSA) I 'should not' request unit consideration.

Why???


Option 4: Unit Consideration (Eligible Electing Shareholders Only) (Subject to Proration- balance of consideration will be received in additional Exchangeable LP Units)- To receive 0.25 (previously 0.225) of a Brookfield Infrastructure Corporation Exchange Limited Partnership class B exchangeable limited partnership unit for every common share of Inter Pipeline Limited tendered, subject to proration, to receive in lieu of the Pro-rated Cash Amount additional Exchangeable LP Units(Please see Important Information for Joint Tax Election details)


Shareholders not resident in Canada for Canadian tax purposes or who hold their shares through a tax-exempt account, including but not limited to registered retirement savings plan, registered retirement income fund, deferred profit sharing plan, registered education savings plan, registered disability savings plan, or a tax-free savings account are not an eligible Electing Shareholder and should not request Unit Consideration. 

The reason is that the unit consideration permits the selling shareholder a tax defferal. Tax is not payable until the Brookfield units are sold. Since shares held in a registered account are not subject to income tax on disposition, the tax deferral is pointless.