Vault Energy Trust

Vault Energy Trust

March 20, 2006 14:37 ET

Vault Energy Announces 2005 U.S. Income Tax Reporting Information

CALGARY, ALBERTA--(CCNMatthews - March 20, 2006) - Vault Energy Trust (TSX:VNG.UN) ("Vault") is pleased to release information to assist its unitholders who are resident in the United States ("U.S. Unitholders") in the preparation of their 2005 Internal Revenue Service ("IRS") Form 1040, "U.S. Individual Income Tax Return".

The information in this release is not a legal opinion or tax advice to any particular U.S. Unitholder, but rather is general information. U.S. Unitholders should consult their own tax advisors as to the tax consequences of holding Vault units in their particular circumstances. Vault has not obtained a legal or tax opinion, nor has it requested a ruling from the IRS, respecting these matters.

Vault believes that in general, 77% of its cash distributions paid during the year to U.S. Unitholders should be reported as a return of capital. If the return of capital portion of distributions received exceeds a U.S. Unitholder's tax basis, the excess should be reported as a capital gain. Vault believes that in general the balance of its distributions paid to U.S. Unitholders (being 23%) should be reported as "qualified dividends" for U.S. tax purposes. However, a U.S. Unitholder's circumstances must be considered before making these determinations in any particular case.

U.S. Unitholders are subject to a 15% Canadian withholding tax on the distributions received from Vault. U.S. Unitholders should receive a NR4 statement regarding, among other things, the aggregate distributions Vault paid for the 2005 calendar year and the amount of Canadian withholding tax withheld from those distributions.

Canadian withholding taxes should generally qualify for a foreign tax credit for the purposes of computing U.S. federal income taxes.

Vault is a conventional oil and gas income trust. Vault units are traded on the Toronto Stock Exchange (TSX) under the symbol "VNG.UN".

Contact Information

  • Vault Energy Trust
    Robert Jepson
    President and Chief Executive Officer
    (403) 444-9662
    Vault Energy Trust
    Greg Fisher
    VP, Finance and Chief Financial Officer
    (403) 444-9651
    Vault Energy Trust
    Nicole Collard
    Investor Relations
    (403) 444-9657