Champion Iron joint tax election
On January 6, 2020 (Montreal time), Champion Iron Limited (“Champion Australia”) issued a press release announcing a proposal to re-domicile Champion Australia in Canada (the “Re-domiciliation“) by way of a scheme of arrangement under Part 5.1 of the Australian Corporations Act 2001 (Cth) (the “Scheme”). For this purpose, Champion Australia has entered into a scheme implementation deed with Champion Iron Inc. (“Champion Canada”), a new company incorporated under the laws of the Province of Quebec, Canada, which, subject to necessary court and shareholder approvals, describes the terms on which Champion Australia and Champion Canada have agreed to pursue the Re-domiciliation.
The Re-domiciliation may have tax consequences for shareholders of Champion Australia (“Champion Australia Shareholders“). Section 10 of the scheme booklet in relation to the Re-domiciliation dated February 5, 2020 (the “Scheme Booklet“) contains detailed information on the potential taxation consequences for Champion Australia Shareholders who are resident in Australia or Canada. The Scheme Booklet is available on the Champion Iron website at: https://www.championiron.com/. The information in the Scheme Booklet regarding the taxation consequences of the Re-domiciliation is general in nature and does not take into account the individual circumstances of Champion Australia Shareholders. Champion Australia Shareholders should seek independent taxation advice on the taxation consequences of the Re-domiciliation.
Any Eligible Scheme Participant (as defined in the Scheme Booklet)(A) who is (i) a resident of Canada for the purposes of the Income Tax Act (Canada) (the “Canadian Tax Act“) and not exempt from tax under Part I of the Canadian Tax Act; (ii) a partnership, any member of which is a resident of Canada for the purposes of the Canadian Tax Act (other than a partnership all members of which are residents of Canada that are exempt from tax under Part I of the Canadian Tax Act); or (iii) a non-resident of Canada, or a partnership with one or more non-resident members, whose shares of Champion Australia are “taxable Canadian property” for purposes of the Canadian Tax Act, , (B) who holds its shares of Champion Australia as capital property or inventory, and (C) who receives shares of Champion Canada as Scheme Consideration should note that, in order to obtain a full or partial deferral of a gain for tax purposes otherwise arising on the disposition of its shares of Champion Australia, such Eligible Scheme Participant will need to make a valid joint election with Champion Canada pursuant to subsection 85(1) of the Canadian Tax Act (or, in the case of a partnership, pursuant to subsection 85(2) of the Canadian Tax Act) in respect of such shares of Champion Australia (a “Joint Tax Election“) and, where applicable, a separate joint tax election for provincial or territorial tax purposes.
Champion Australia has established this special purpose web portal (the “Joint Tax Election Website” or “Website“) and process to provide assistance to Champion Australia Shareholders in taking the necessary steps to file the tax-deferred rollover joint election.
Therefore, this Website is only relevant to Champion Australia Shareholders who:
are subject to tax in Canada with respect to the disposition of their shares of Champion Australia;
are partnerships the members of which include, either directly or indirectly through one or more partnerships, a person that is subject to tax in Canada with respect to the disposition of their shares of Champion Australia; or
are non-residents of Canada, or who are partnerships with one or more non-resident members, whose shares of Champion Australia are “taxable Canadian property” for purposes of the Canadian Tax Act;
and, in each case, who hold their shares of Champion Australia as capital property or inventory and receive shares of Champion Canada as consideration for their shares of Champion Australia.
This Website is not relevant to Champion Australia Shareholders who do not fall into the categories above.
To be notified of the availability of the Joint Tax Election Website and to receive the necessary instructions package on how to access and complete the required information on that site, Champion Australia Shareholders should click “Registration Site” below and provide the requested information, including a valid e-mail address.