Freehold Royalty Trust
TSX : FRU.UN

Freehold Royalty Trust

February 19, 2009 17:33 ET

Freehold Royalty Trust Announces 2008 Income Tax Information for Canadian Investors

CALGARY, ALBERTA--(Marketwire - Feb. 19, 2009) -

The information contained herein is based on Freehold Royalty Trust's (Freehold or the Trust) (TSX:FRU.UN) understanding of the Income Tax Act (Canada) and the regulations thereunder and is provided for general information only. Unitholders are advised to consult their personal tax advisors with respect to their particular circumstances.

CANADIAN TAX INFORMATION FOR UNITHOLDERS RESIDENT IN CANADA

The following information is intended to assist individual Canadian Unitholders of Freehold in the preparation of their 2008 T1 Income Tax Return. This summary is directed to a Unitholder who, for the purposes of the Income Tax Act (Canada) is a resident of Canada and holds the Trust Units as capital property.

2008 Taxability Information

A total of $2.91 per Trust Unit was paid or payable to Unitholders in respect of 2008.

For purposes of the Income Tax Act (Canada), Freehold is treated as a mutual fund trust. Each year, Freehold files a T3 income tax return with the taxable income allocated to and made taxable in the hands of Unitholders. This taxable income is allocated, on T3 supplementary forms, to each Unitholder who was entitled to distributions for the year. The following table outlines the breakdown of cash distributions per Trust Unit paid or payable in respect of 2008.



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CANADIAN TAX INFORMATION 2008
Taxable
Amount Box 42
Box 26 Return Total
Other of Distribution
Income Capital Paid/Payable
(Cdn$ (Cdn$ (Cdn$
Record Date Payment Date per Unit) per Unit) per Unit)
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January 31, 2008 February 15, 2008 $ 0.14327 $ 0.00673 $ 0.1500
February 29, 2008 March 15, 2008 $ 0.14327 $ 0.00673 $ 0.1500
March 31, 2008 April 15, 2008 $ 0.14327 $ 0.00673 $ 0.1500
April 30, 2008 May 15, 2008 $ 0.17193 $ 0.00807 $ 0.1800
May 31, 2008 June 15, 2008 $ 0.17193 $ 0.00807 $ 0.1800
June 30, 2008 July 15, 2008 $ 0.23879 $ 0.01121 $ 0.2500
July 31, 2008 August 15, 2008 $ 0.23879 $ 0.01121 $ 0.2500
August 31, 2008 September 15, 2008 $ 0.23879 $ 0.01121 $ 0.2500
September 30, 2008 October 15, 2008 $ 0.23879 $ 0.01121 $ 0.2500
October 31, 2008 November 15, 2008 $ 0.23879 $ 0.01121 $ 0.2500
November 30, 2008 December 15, 2008 $ 0.23879 $ 0.01121 $ 0.2500
December 31, 2008 January 15, 2009 $ 0.57310 $ 0.02690 $ 0.6000 (1)
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Total paid/payable for the 2008
taxation year $ 2.77952 $ 0.13048 $ 2.9100
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(1) Includes an additional $0.35 representing excess funds in 2008.


Trust Units held within Registered Plans

Freehold Trust Units are qualified investments for registered plans, including Registered Retirement Savings Plans (RRSP), Registered Retirement Income Funds (RRIF), Deferred Profit Sharing Plans (DPSP), and Registered Educational Savings Plans (RESP). Trust Units held inside such registered plans are completely tax-sheltered and no amounts are required to be reported on the 2008 T1 Income Tax Return.

Trust Units held outside of Registered Plans

For Canadian residents who hold Trust Units outside of a registered plan, 96% of the distributions are taxable as income. The remaining 4% of distributions are classified as a return of capital.

The deadline for mailing all T3 Supplementary information slips as required by Canada Revenue Agency is March 31, 2009.

- Registered Unitholders who were entitled to distributions for 2008 and received payment from the Transfer Agent, Computershare Trust Company of Canada (and not from a brokerage firm or other intermediary) will receive a T3 Supplementary slip directly from Computershare.

- Non-Registered Unitholders who were entitled to distributions for 2008 and received payment or credit from a brokerage firm or other intermediary will receive a T3 Supplementary slip directly from that brokerage firm or other intermediary and not from the Transfer Agent or Freehold.

Adjusted Cost Base Calculation

Unitholders are required to reduce the adjusted cost base (ACB) of their Trust Units by the amount equal to any distributions received in the form of return of capital. Unitholders should maintain a record of all distributions that are classified as partially or entirely a return of capital distribution while holding Freehold Trust Units.

For Freehold investors in the $10.00 per Trust Unit initial public offering in November 1996, the ACB of Trust Units still held as at December 31, 2008 is $3.0106 per Trust Unit, taking into account the cumulative return of capital of $6.9894 as provided in the following table:



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HISTORICAL TAX INFORMATION

Taxable
Amount
Other Return of
Income Capital Return Distribution for
(Cdn$ (Cdn$ Taxable of Capital Tax Purposes
Year per Unit) per Unit) Percentage Percentage Per Unit
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2008 $ 2.7795 $ 0.1305 96% 4% $ 2.91
2007 1.7426 0.1774 91% 9% 1.92
2006 1.8900 0.2100 90% 10% 2.10
2005 2.0400 - 100% 0% 2.04
2004 1.1628 0.5472 68% 32% 1.71
2003 1.1730 0.5270 69% 31% 1.70
2002 0.7598 0.5502 58% 42% 1.31
2001 0.5928 0.9672 38% 62% 1.56
2000 - 1.2900 0% 100% 1.29
1999 - 0.7600 0% 100% 0.76
1998 - 0.8500 0% 100% 0.85
1997 - 0.9800 0% 100% 0.98
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TOTAL $ 12.1406 $ 6.9894 $ 19.13
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CANADIAN TAX INFORMATION FOR NON-RESIDENT UNITHOLDERS

The following information is provided for general information only. Unitholders who are not residents of Canada for income tax purposes are encouraged to seek advice from a qualified tax advisor in their country of residence regarding the tax treatment of distributions.

NR4 Summary and Slips

For the purposes of preparing Form NR4, Statement of Amounts Paid or Credited to Non-Residents of Canada, 2008 distributions are 96% taxable for Canadian purposes and this amount is included in the gross income reported in Box 16 of the NR4 slip. The full amount of the tax withheld is reported in Box 17 of the NR4 slip.

Non-Resident Withholding Tax

Distributions paid or payable to non-residents of Canada are subject, on the date of payment, to a withholding tax of 25%, as prescribed by the Income Tax Act (Canada). This withholding tax may be reduced in accordance with reciprocal tax treaties. In the case of the Tax Treaty between Canada and the U.S., the withholding tax for U.S. residents is prescribed at 15%.

The amount of Canadian tax withheld should be reported on Form 1116, Foreign Tax Credit (individual, Estate, or Trust). Information regarding the amount of Canadian tax withheld in 2008 should be determined from your own records and is not available from Freehold. Amounts over withheld, if any, from Canada should be claimed as a refund from the Canada Revenue Agency no later than two years after the calendar year in which the payment was paid.

CANADIAN TAX INFORMATION FOR UNITHOLDERS RESIDENT IN THE U.S.

Based on the nature of our assets, our distributions are not "qualified dividends" for U.S. tax purposes. Freehold prepares an earnings and profit calculation to determine taxability for U.S. Unitholders. Please refer to Freehold's 2008 Income Tax Information for U.S. Investors and the Annual PFIC (Passive Foreign Investment Company) Statement. This information will be posted on Freehold's website at www.freeholdtrust.com or can be obtained by contacting Freehold's Investor Relations department.

Canada Revenue Agency (CRA) Account Number: T16-5701-42

CUSIP Number: 355904103

Contact Information