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Press release from Marketwire

2010 Income Tax Information for Freehold Royalty Trust

Tuesday, February 15, 2011

2010 Income Tax Information for Freehold Royalty Trust13:00 EST Tuesday, February 15, 2011CALGARY, ALBERTA--(Marketwire - Feb. 15, 2011) -Freehold Royalties Ltd. (TSX:FRU) announces the 2010 Income Tax Information for Freehold Royalty Trust ("Freehold" or the "Trust").The information contained herein is based on Freehold Royalties Ltd.'s understanding of the Income Tax Act (Canada) and the regulations thereunder. Unitholders should consult their own tax advisors with respect to their particular circumstances.CANADIAN TAX INFORMATIONFOR UNITHOLDERS RESIDENT IN CANADAThe following information is intended to assist individual Canadian Unitholders of Freehold in the preparation of their 2010 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 held the Trust Units as capital property.2010 Taxability InformationA total of $1.68 per Trust Unit was paid or payable to Unitholders in respect of 2010.For purposes of the Income Tax Act (Canada), Freehold was treated as a mutual fund trust. Each year, Freehold filed a T3 income tax return with the taxable income allocated to and made taxable in the hands of Unitholders. This taxable income is allocated, on T3 supplementary forms, to each Unitholder who was entitled to distributions for the year. The following table outlines the breakdown of cash distributions per Trust Unit paid or payable in respect of 2010.----------------------------------------------------------------------------CANADIAN TAX INFORMATION 2010 Taxable Amount Box 42 Total Box 26 Return of Distribution Other Income Capital Paid/PayableRecord Date Payment Date (Cdn$ per Unit)(Cdn$ per Unit)(Cdn$ per Unit)----------------------------------------------------------------------------January 31, 2010 February 15, $0.10258 $0.03742 $0.1400 2010 February 28, $0.10258 $0.03742 $0.1400 2010 March 15, 2010 March 31, 2010 April 15, 2010 $0.10258 $0.03742 $0.1400April 30, 2010 May 15, 2010 $0.10258 $0.03742 $0.1400May 31, 2010 June 15, 2010 $0.10258 $0.03742 $0.1400June 30, 2010 July 15, 2010 $0.10258 $0.03742 $0.1400July 31, 2010 August 15, 2010 $0.10258 $0.03742 $0.1400August 31, 2010 September 15, $0.10258 $0.03742 $0.1400 2010 September 30, October 15, $0.10258 $0.03742 $0.1400 2010 2010 October 31, 2010 November 15, $0.10258 $0.03742 $0.1400 2010 November 30, December 15, $0.10258 $0.03742 $0.1400 2010 2010 December 31, January 17, $0.10258 $0.03742 $0.1400 2010 2011 ----------------------------------------------------------------------------Total paid/payable for the 2010 $1.23091 $0.44909 $1.6800 tax year --------------------------------------------------------------------------------------------------------------------------------------------------------Trust Units held within Registered PlansFreehold Trust Units are qualified investments for registered plans, including Registered Retirement Savings Plans (RRSP), Registered Retirement Income Funds (RRIF), Deferred Profit Sharing Plans (DPSP), Registered Educational Savings Plans (RESP) and Tax Free Savings Accounts (TFSA). Trust Units held inside such registered plans are completely tax-sheltered and no amounts are required to be reported on the 2010 T1 Income Tax Return.Trust Units held out side of Registered PlansFor Canadian residents who hold Trust Units outside of a registered plan, 73% of the distributions are taxable as income. The remaining 27% 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, 2011.-- Registered Unitholders who were entitled to distributions for 2010 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 2010 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 CalculationUnitholders 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, 2010 is $2.3113 per Trust Unit, taking into account the cumulative return of capital of $7.6889 as provided in the following table:----------------------------------------------------------------------------HISTORICAL TAX INFORMATION Distribution Taxable Amount Return Return for Other Income of Capital Taxable of Capital Tax PurposesYear (Cdn$ per Unit) (Cdn$ per Unit) Percentage Percentage Per Unit----------------------------------------------------------------------------2010 $ 1.2309 $0.4491 73% 27% $ 1.682009 1.1498 0.2502 82% 18% 1.402008 2.7795 0.1305 96% 4% 2.912007 1.7426 0.1774 91% 9% 1.922006 1.8900 0.2100 90% 10% 2.102005 2.0400 - 100% 0% 2.042004 1.1628 0.5472 68% 32% 1.712003 1.1730 0.5270 69% 31% 1.702002 0.7598 0.5502 58% 42% 1.312001 0.5928 0.9672 38% 62% 1.562000 - 1.2900 0% 100% 1.291999 - 0.7600 0% 100% 0.761998 - 0.8500 0% 100% 0.851997 - 0.9800 0% 100% 0.98----------------------------------------------------------------------------TOTAL $14.5213 $7.6887 $22.21--------------------------------------------------------------------------------------------------------------------------------------------------------CANADIAN TAX INFORMATIONFOR NON-RESIDENT UNITHOLDERSThe 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 SlipsFor the purposes of preparing Form NR4, Statement of Amounts Paid or Credited to Non-Residents of Canada, 2010 distributions are 73% 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 TaxDistributions 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 2010 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 INFORMATIONFOR 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 2010 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.freeholdroyalties.com or can be obtained by contacting Freehold's Investor Relations department.Canada Revenue Agency (CRA) Account Number: T16-5701-42CUSIP Number: 355904103FOR FURTHER INFORMATION PLEASE CONTACT: Brian BrockmanFreehold Royalties Ltd.Manager, Tax and Financial Planning(403) 221-0856 or Toll Free: 1-888-257-1873bbrockman@rife.comwww.freeholdroyalties.com