The following information is intended to assist individual unitholders of the Bell Aliant Regional Communications Income Fund (the "Fund"). Please check back frequently for updates.

Bell Aliant Distribution Mix, Cash Distribution and Eligible Dividend Designation

Info for Canadian Unitholders

Info for U.S. Residents and Other Non-Residents of Canada

For all other types of Canadian taxpayers (i.e. corporations, partnerships, trusts, etc.), please consult a tax and/or financial advisor with respect to the Canadian tax treatment of cash distributions received from the Fund.

For U.S. and other non-resident Unitholders, please refer to the special section below - Tax Information for U.S. Residents and Other Non-Residents of Canada.

The information that follows is not exhaustive of all possible Canadian federal tax considerations applicable to an investment in the Fund's units. Moreover, the income and other tax consequences of acquiring, holding or disposing of the Fund's units will vary depending on the unitholder's particular circumstances, including the province or territory in which you reside. Accordingly, this summary is of a general nature only and is not intended to be legal or tax advice to any holder of the Fund's units. Investors should consult their own tax advisors for advice with respect to the tax consequences of an investment in the Fund's units based on their particular circumstances.

We intend to inform our investors annually of the nature of their distributions. The breakdown will specify the portion relating to interest income, to dividend income and the portion relating to return of capital.

Tax Information for Canadian Unitholders

The following summary is intended to assist individual Canadian resident Unitholders of the Fund with respect to the treatment of cash distributions received from the Fund for Canadian income tax purposes.

Monthly Cash Distributions: While the distributions from the Fund may generally consist of other investment, interest income, dividend income and/or return of capital components, the Fund expects that all or substantially all of its distributions will be taxable to individual Canadian resident Unitholders for the foreseeable future.

Units held within a Tax Free Savings Account (TFSA): If the Fund units are held within a TFSA the amount of the cash distributions received from the Fund will not be taxable to the individual Canadian resident unitholder.  Funds withdrawn from a TFSA will not be taxable.

Units held within an RRSP, RRIF, or DPSP: If the Fund units are held within an RRSP, RRIF or DPSP, the amount of the cash distributions received from the Fund will not be taxable to the individual Canadian resident unitholder, until funds are withdrawn from the RRSP, RRIF or DPSP.

Tax Slips: Individual Canadian resident Unitholders, who hold their units outside of an RRSP, RRIF, DPSP or TFSA and who have received cash distributions during a particular calendar year, will receive a T3 slip by March 31 of the following year, which is the filing deadline legislated under the Income Tax Act (Canada). Unitholders who hold their units through a broker will receive the T3 from their broker; registered unitholders will receive the T3 from our transfer agent CIBC Mellon Trust Company. Unitholders who are resident in the province of Quebec on December 31 of the particular calendar year will also receive a Relevé 16 slip. The T3/Relevé 16 slips will provide sufficient detail as to the taxable portion of the cash distributions to the individual Canadian resident Unitholders. To the extent that taxable amounts are designated as taxable dividends from taxable Canadian corporations, the gross-up and the dividend tax credit provisions of the Income Tax Act will be applicable. Unless otherwise notified, all of the taxable amounts designated as taxable dividends will be designated as eligible dividends, which will be subject to an enhanced dividend gross-up of 45% and a dividend tax credit equal to 11/18th of that gross-up.

For eligible dividends received after 2009, the gross-up, federal dividend tax credit, and top federal rate are as follows:

Calculation of Adjusted Cost Base (ACB): Investors are required to reduce the adjusted cost base (ACB) of their units by the amount of any distribution received in the form of return of capital each year. The ACB is used to compute the gain or loss on the sale of the units. To the extent that the ACB of a Unit would otherwise be a negative amount, the negative amount will be deemed to be a capital gain and the adjusted cost base of the Unit to the Unitholder will be nil.

Tax Information for U.S. Residents and Other Non-Residents of Canada:
Distributions paid to Unitholders who are non-residents of Canada for Canadian income tax purposes Distributions paid to Unitholders who are non-residents of Canada for Canadian income tax purposes are normally subject to a withholding tax of 25% of the taxable amount of the distribution (i.e. investment, interest, dividend income and capital gains realized on disposition of Taxable Canadian Property portion only), as required by Canadian income tax laws, unless a lower percentage is prescribed by a reciprocal tax treaty in effect between Canada and the non-resident's country of residence. For example, for individual Unitholders who are residents of the U.S., the reciprocal tax treaty between Canada and the U.S. prescribes a reduction of the withholding tax rate to 15% on the taxable amount of a distribution received from a trust. Please note that there is no withholding tax requirement on the portion of the distribution classified as a “return of capital”.

The nature of the income received by US investors from the Fund (interest or dividends) will be based on the distributions made to the Fund by certain of its subsidiaries. Interest paid by these subsidiaries will be taxed as interest in the hands of the Investor. Dividends paid by these subsidiaries will be taxed as dividends in the hands of the Investor for US tax purposes, unless their amount exceeds the subsidiaries earnings and profits (E&P). As each of the distributing subsidiaries are  Canadian limited partnerships, these entities are not required to compute E&P for US tax purposes and  do not anticipate doing so. Investors should therefore assume that these amounts constitute dividends for US tax purposes. The Fund should meet the definition of a qualified foreign business and as such individuals should be able to benefit from the 15% maximum US federal tax rate on such dividends, provided they meet the required 60 day holding period. We intend to inform our US Investors annually of the nature of their distributions

Given the fact that the information above is not exhaustive of all possible Canadian and foreign tax considerations applicable to an investment in the Fund's units by a non-resident of Canada for Canadian tax purposes, such Unitholders are encouraged to seek advice from a qualified tax advisor in their country of residence.

Archive: Important Tax Information regarding Tax Slips for 2006