Canadian Oil Sands Limited

Canadian Oil Sands Limited

February 17, 2011 13:23 ET

Tax Information Available for Canadian Oil Sands Trust's 2010 Distributions

CALGARY, ALBERTA--(Marketwire - Feb. 17, 2011) - Canadian Oil Sands Limited ("COS" or "we") (TSX:COS) today reported the tax information for the cash distributions declared and paid in 2010 by its predecessor, Canadian Oil Sands Trust (the "Trust") to holders resident in Canada and the United States ("U.S.").

The following information is provided for general information only and should not be considered tax or legal advice to any particular existing or potential holder of common shares (formerly Trust Units). Shareholders are strongly encouraged to consult their tax advisors with respect to their particular circumstances.

Tax information for holders resident in Canada

The following information is based on COS's understanding of the Income Tax Act (Canada) and regulations thereunder.

No amounts are required to be reported for tax purposes in respect of cash distributions on the Trust's Units received in 2010 by a Registered Retirement Savings Plan, Registered Pension Plan, Registered Retirement Income Fund or Deferred Profit Sharing Plan or any other such registered plans ("Deferred Plans"). For cash distributions received by a Canadian resident individual outside of a Deferred Plan, 99.9938 per cent of the payments are taxable as income.

The following table outlines the breakdown of cash distributions per Unit paid by COS with respect to record dates for the year ended December 31, 2010.

Cdn$ Total
Cash Cdn$ Taxable Cdn$ Tax Deferred
Distribution Amount Per Unit Amount Per Unit
Record Date Payment Date Per Unit (99.994 per cent) (0.006 per cent)
Feb. 18, 2010 Feb. 26, 2010 0.35 0.34998 0.00002
May 20, 2010 May 31, 2010 0.50 0.49997 0.00003
Aug. 23, 2010 Aug. 31, 2010 0.50 0.49997 0.00003
Nov. 19, 2010 Nov. 30, 2010 0.50 0.49997 0.00003
Total 1.85 1.84989 0.00011

T3 Statement of Trust Income Allocations and Designations forms are expected to be mailed on or before March 31, 2011 to persons that held and received distributions in relation to Canadian Oil Sands Trust's Units in 2010. This statement will be sent by your financial institution if the Units (now common shares) are held in non-registered or nominee form, or by Computershare if the Units (now common shares) are held in registered form.

Tax information for holders resident in the U.S.

Canadian Oil Sands believes that the distributions paid by the Trust in the 2010 calendar year are considered foreign-source dividend income under U.S. federal income tax principles. Providing that applicable holder-level requirements are met, these distributions are "qualified dividends" eligible for taxation at reduced rates under U.S. federal income tax legislation; however, Canadian Oil Sands has not received an IRS letter ruling or tax opinion from its tax advisors on these matters, and the individual taxpayer's situation must be considered before making this determination.

Generally, distributions payable to non-residents of Canada are normally subject to a withholding tax of 25 per cent as prescribed by the Income Tax Act (Canada); however, the withholding tax for residents of the U.S. is prescribed at 15 per cent in accordance with a reciprocal tax treaty between the U.S. and Canada. U.S. taxpayers may be eligible for a foreign tax credit with respect to the Canadian withholding taxes paid. Other jurisdictions may also have reciprocal tax treaties that would reduce the withholding tax rate.

A Canadian NR4 (non-resident) supplemental form detailing the Canadian tax withheld and remitted to the Canadian government will be mailed to those individuals that were non-resident Unitholders by your financial institution if the Units (now common shares) are held in non-registered or nominee form, or by Computershare if the Units (now common shares) are held in registered form.

The following table provides the breakdown of the amount of cash distribution, prior to the Canadian withholding tax, paid by the Trust in 2010.

US$/Cdn$ Per cent of
Currency Distribution
Exchange US$ Return of
Cdn$ Rate on Equivalent Per cent of Capital/
Record Payment Distribution Payment Distribution Distribution Capital
Date Date Per Unit Date Per Unit Taxable Gain
Feb. 18, Feb. 26,
2010 2010 0.35 0.9500 0.33250 95.46 4.54
May 20, May 31,
2010 2010 0.50 0.9558 0.47790 95.46 4.54
Aug. 23, Aug. 31,
2010 2010 0.50 0.9399 0.46995 95.46 4.54
Nov. 19, Nov. 30,
2010 2010 0.50 0.9743 0.48715 95.46 4.54
Total 1.85 1.76750 95.46 4.54

It is possible that the U.S. dollar amount was different for non-registered, or beneficial Unitholders receiving their payment from an intermediary or brokerage firm using different exchange rates.

For more information

For any questions regarding the supplemental tax forms, please contact your financial institution if your Units (now common shares) are held in non-registered form. If your Units (now common shares) are held in registered form, contact the Trustee and Transfer Agent, Computershare Trust Company of Canada, at 1-800-564-6253. For all other inquiries, please contact Canadian Oil Sands. Further tax information for Canadian Oil Sands Trust and a tax summary of distributions paid since inception are available on COS' Web site at under Investor Centre/Shareholder Information.

Canadian Oil Sands Limited completed the reorganization of Canadian Oil Sands Trust into a corporation on December 31, 2010. Pursuant to the reorganization, all outstanding Units of the Trust were exchanged for common shares of COS on a one-for-one basis. Canadian Oil Sands Limited will be subject to corporate taxation beginning on January 1, 2011, with cash payments to shareholders considered dividends paid on COS' common shares. For information on the tax considerations, please see COS' Plan of Arrangement dated March 15, 2010, which is available on our website at under Financial Reports and Filings/Supplementary Information.

Canadian Oil Sands Limited is the largest joint venture owner of Syncrude, a major producer of light, sweet, synthetic crude oil. We hold a 36.74 per cent working interest in Syncrude, generating revenue from our share of production and demonstrating a history of paying quarterly dividends. COS is a unique investment in long-term crude oil producing assets. Syncrude's productive capacity is 350,000 barrels per day and its reserve base could support production at that level for decades.

Canadian Oil Sands Limited

Marcel Coutu

President & Chief Executive Officer

Shares Listed - Symbol: COS

Toronto Stock Exchange

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