FAQ
Frequently Asked Questions
Technical Tax Questions
Q1. What is a Joint Tax Election?
A Joint Tax Election is a tax election filed jointly by a Shareholder and New BNC under section 85 of the Income Tax Act (Canada) (the “Tax Act”). It is what allows an Eligible Canadian Holder of BN Class A Shares (a Canadian-resident, taxable Shareholder, as more fully described in the MIC) to defer all or part of the capital gain that would otherwise arise on the exchange of those Shares for Exchangeable Shares of New BNC pursuant to the Transaction.
In practice, the Shareholder and New BNC agree on a single dollar figure — the “Elected Amount” — which is treated for tax purposes as both the proceeds of disposition of the BN Class A Shares and the cost of the Exchangeable Shares received. By choosing an Elected Amount within the limits set by section 85 (broadly, between the adjusted cost base of the Shares and their fair market value at the time of the exchange), the Shareholder can fully or partially defer the capital gain.
The Joint Tax Election is filed using CRA Form T2057 (or, where the Shares are held as Canadian partnership property, Form T2058), together with any required provincial election forms. The detailed mechanics, eligibility rules, Elected Amount limits, deadlines and process for preparing and filing the forms are described in the questions that follow and, more fully, in the MIC.
Q2. What is the taxation implication for Shareholders in connection with the Exchangeable Shares?
The Transaction involves an exchange of all Class A Shares of BN for new Class A Shares of Brookfield Corporation Ltd. (“New BN”). The exchange of shares is considered a taxable event that may give rise to a capital gain (or loss). Alternatively, Eligible Canadian Holders may elect to receive Exchangeable Shares in New BNC on a tax deferred or partially tax deferred basis.
For additional information and a more complete summary of the principal Canadian federal income tax considerations of the Transaction, refer to the MIC.
For the purpose of this site, we have duplicated certain information from the MIC relevant to Eligible Canadian Holders that wish to defer all or a portion of the capital gain by requesting to jointly file an election with New BNC in accordance with section 85 of the Tax Act.
Taxable Transaction – No Section 85 Election
Canadian-resident Shareholders that do not elect to receive Exchangeable Shares in New BNC will receive, for each BN Class A Share held, one Class A Share in the new parent entity, New BN.
The exchange of BN Class A Shares for New BN Class A Shares generally will be a taxable disposition for Canadian income tax purposes.
Such a Shareholder will realize a “capital gain” (or “capital loss”) (as each such term is defined in the Tax Act) to the extent that the proceeds of disposition of the Shares so disposed of, net of any reasonable costs of disposition, exceed (or are less than) the “adjusted cost base” (as defined in the Tax Act) to the Shareholder of such Shares.
Tax Deferred or Partially Tax Deferred Transaction – Section 85 Election
An Eligible Canadian Holder of BN Class A Shares may instead elect to receive Exchangeable Shares in New BNC as consideration for their BN Class A Shares pursuant to the Transaction.
Generally an Eligible Canadian Holder who validly makes a Joint Tax Election with New BNC under Section 85 of the Tax Act may obtain a full or partial deferral of any capital gain that would otherwise arise on the disposition of such Eligible Canadian Holder’s BN Class A Shares.
New BNC has agreed to make a Joint Tax Election with an Eligible Canadian Holder at the elected amount (the “Elected Amount”) determined by such Eligible Canadian Holder, subject to the limitations set out in section 85 of the Tax Act.
The limitations imposed by the Tax Act in respect of the Elected Amount are that the Elected Amount:
- may not be less than the lesser of:
- the adjusted cost base to the Eligible Canadian Holder of the Shares that are exchanged, determined immediately before the time of the exchange; and
- the fair market value of such Shares at that time;
- may not exceed the fair market value of such Shares at the time of the exchange.
An Elected Amount that does not otherwise comply with the foregoing limitations will be automatically adjusted under the Tax Act so that it is in compliance.
Where an Eligible Canadian Holder and New BNC make a Joint Tax Election that complies with the above rules and the Joint Tax Election is filed on a timely basis, the tax treatment to the Eligible Canadian Holder will generally be as follows:
- such Shares that are the subject of the Joint Tax Election will be deemed to be disposed of by the Eligible Canadian Holder for proceeds of disposition equal to the Elected Amount;
- if such proceeds of disposition in respect of such Shares are equal to the aggregate of the adjusted cost base thereof to the Eligible Canadian Holder, determined immediately before the exchange, and any reasonable costs of disposition, no capital gain or capital loss will be realized by the Eligible Canadian Holder;
- to the extent that such proceeds of disposition in respect of such Shares exceed (or are less than) the aggregate of the adjusted cost base of such Shares to the Eligible Canadian Holder and any reasonable costs of disposition, such Eligible Canadian Holder will in general realize a capital gain (or a capital loss); and
- the cost to the Eligible Canadian Holder of the Exchangeable Shares acquired on the exchange for such Shares will generally be equal to the Elected Amount.
Taxation of Registered Plans
Registered Plans (as defined in the MIC, including TFSAs, RRSPs, and certain other registered plans) and deferred profit sharing plans (“DPSPs”) (as defined in the Tax Act), will not be Eligible Canadian Holders and will therefore not qualify to acquire Exchangeable Shares under the Transaction.
Q3. How do I calculate the ACB of my Shares?
The starting point of determining the ACB of shares that are capital property will generally be the amount that the Shareholder paid for the Shares when they were originally acquired plus reasonable costs to acquire the shares such as broker commissions and fees. The ACB may be adjusted in certain circumstances (e.g., where a Shareholder received their Shares due to a previous tax-deferred transaction or by way of a gift). Special rules may apply if the Shares were received as a distribution or through the exercise of options.
The rules for determining ACB are complex. Brookfield does not have access to information that can assist Shareholders in determining their particular ACB. You should consult your own tax advisor to obtain assistance.
Q4. I am a non-resident of Canada. What are my tax consequences resulting from the exchange?
Shareholders that are not resident or deemed to be resident in Canada will not be Eligible Canadian Holders and will therefore not qualify to acquire Exchangeable Shares under the Transaction.
Generally, the BN Class A Shares will not constitute Taxable Canadian Property (“TCP”) of a Non-Resident Holder for purposes of the Tax Act. As a result, a Non-Resident Holder generally will not be subject to tax under the Tax Act in respect of a capital gain realized on the disposition of a BN Class A Share under the Transaction. This area is complex and such Shareholders should consult their own tax advisors.
Non-resident Shareholders may still have tax consequences in their country of residence and should seek tax advice with respect to their particular circumstances.
Q5. What if the Shares are held as Canadian partnership property?
Where Shares are held as property of a Canadian partnership (within the meaning of the Tax Act), a partner designated by the partnership must file one copy of the CRA Form T2058 on behalf of all members of the partnership (and, where applicable, the corresponding form in duplicate with the relevant provincial authorities). The CRA Form T2058 must be accompanied by a list containing the name, address, social insurance number or tax account number of each partner as well as the document signed by each partner authorizing the designated partner to complete and file the form. Partnerships that are not Canadian partnerships do not qualify to make the Joint Tax Election under section 85 of the Tax Act.
Q6. How do I choose an Elected Amount?
It is important to seek professional advice to determine your particular facts and circumstances. For example, by choosing an Elected Amount equal to the ACB rather than Fair Market Value (FMV), Eligible Canadian Holders can potentially trigger no immediate capital gain. Alternatively, some Eligible Canadian Holders may choose an amount higher than the ACB and lower than the FMV to trigger a gain for offset by personal capital losses or other available exemptions, depending on their personal tax situation. Please seek tax advice.
Q7. I filed the Joint Tax Election to obtain a full tax-deferred rollover. Do I have to report the disposition on my tax return for the period that includes the disposition of the Shares?
Yes. You must report the disposition of the Shares even though you elected to obtain a full deferral of any capital gain that might otherwise arise on the disposition of your Shares. Your proceeds of disposition for Canadian income tax purposes will be equal to the Elected Amount set out in box B on page 3 of the federal Joint Tax Election (and equivalent box on a Québec Joint Tax Election).
Q8. If I make a Joint Tax Election in Québec, am I required to make a federal Joint Tax Election?
Yes, a Shareholder making a Québec Joint Tax Election must also make a federal Joint Tax Election. Note that a copy of the federal Joint Tax Election must be submitted to Revenu Québec when filing the Québec Joint Tax Election. A Shareholder that is a corporation established in Québec is required to file the French version of the Québec Joint Tax Election; however, the copy of the federal Joint Tax Election can be the English version.
Q9. When is the deadline to submit the election forms to the tax authorities?
The required election forms must be received by the appropriate tax authorities on or before the day that is the earliest of the days on or before which either New BNC or the electing Eligible Canadian Holder (or any partner thereof where the electing Eligible Canadian Holder is a partnership) is required to file a Canadian income tax return for the taxation year in which the disposition of the Shares occurs. The relevant taxation year of New BNC is scheduled to end on or around December 31, 2026. New BNC’s income tax return is required to be filed within six (6) months of its taxation year end. Thus, if the exchange occurs prior to December 31, 2026, the tax election forms will, in the case of an electing Eligible Canadian Holder who is an individual (other than a trust), generally be due by April 30, 2027. This deadline may be different if the electing Eligible Canadian Holder is a Corporation, Partnership, Trust, etc. All electing Eligible Canadian Holders should consult their own advisors respecting the deadlines applicable to their own particular circumstances (including, where applicable, provincial deadlines).
Administrative Questions
Q10. How do I confirm the number of shares that I own?
If you are a registered shareholder (meaning that you either hold a physical certificate or a direct registration statement representing your Shares), the depositary should be able to provide you with confirmation of your current registered position.
If you hold your Shares in an account with an investment dealer or broker, they should be able to provide you with this information. Alternatively, this information will be on your most recent brokerage statement.
Q11. I co-owned Shares with another party (e.g. my spouse). Who should complete and sign the Joint Tax Election?
A single Questionnaire may be used for the federal Tax Election or the applicable election under any similar provincial legislation if one Co-Owner is chosen to submit the Tax Election Information on behalf of all Co-Owners (the “Designated Co-Owner”). If a single Questionnaire is being used, you must respond “Yes” to the question of whether you are requesting a Tax Election on behalf of all electing Co-Owners in the Questionnaire.
The Designated Co-Owner must provide the required information for each electing Co-Owner in the Questionnaire. New BNC will prepare the Joint Tax Election(s) for each Co-Owner and send the forms to the Designated Co-Owner. Then the Designated Co-Owner must sign one completed copy of each Tax Election and file the forms together with a list of all Co-Owners electing and proof of authority to sign on behalf of such Co-Owners with the CRA and provincial tax authority, as applicable.
Alternatively, each Co-Owner may complete their own Questionnaire. In this case, each Co-Owner should set out the Co-Owner's respective ownership interest (i.e., percentage) in the Shares held by all Co-Owners and report amounts on the Co-Owner Questionnaire corresponding to that ownership percentage.
For Shares held as partnership property see Q5.
Q12. Will I receive help to complete the Joint Tax Election?
To enable Eligible Canadian Holders to submit the information required to prepare the Joint Tax Election (the “Joint Tax Election Information”), New BNC has made the Questionnaire available to Shareholders in a web-based format through the Tax Election Portal.
After receiving the Joint Tax Election Information submitted using the Tax Election Portal, KPMG, as the appointed agent assisting New BNC with the tax election process and technology, will compile a Joint Tax Election form(s) based solely on the Joint Tax Election Information provided by the Shareholder.
Shareholders may contact KPMG via the Technical Assistance Hotline for the Tax Election Portal for technical assistance regarding the submission of information. However, neither New BNC nor KPMG (nor any other agents supporting the Tax Election Portal) will provide legal or tax advice to any Shareholder in connection with their Joint Tax Election.
It is each Shareholder's responsibility to review the Joint Tax Election form for accuracy and completeness, sign it and file it with the CRA and, if applicable, provincial or territorial taxing authorities.
Neither New BNC, the Depositary, KPMG, nor any of the appointed agents or representatives assisting with the tax election process and technology will verify the accuracy of the Joint Tax Election Information submitted by a Shareholder.
For a description of the material Canadian federal income tax considerations of the Transaction to Shareholders, please see “Certain Canadian Federal Income Tax Considerations” in the MIC. Discussion of Canadian income tax consequences in the MIC is not intended to be legal, business or tax advice.
Shareholders are urged to consult their own legal and tax advisors as to the tax consequences of the Transaction to them with respect to their particular circumstances. Eligible Canadian Holders wishing to make a section 85 election should consult their own tax advisors.
Q13. I have completed and submitted the Questionnaire. What do I do next?
After receiving a properly completed Questionnaire, a Joint Tax Election will be compiled using the information that you provided. The completed Joint Tax Election will be provided to you no later than 30 days after submission of the Questionnaire, subject to the information you provided being complete. The Joint Tax Election(s) will be executed and an electronic copy will be sent to you using the e-mail address provided in the Questionnaire.
You should then review the Joint Tax Election. If you do not agree with the content, calculations or any disclosures, contact the Technical Assistance Hotline indicated in the instructions that will be provided in the e-mail containing the executed election. If you are satisfied, sign and file the Joint Tax Election(s) with the CRA and provincial or territorial taxing authorities, if applicable.
Q14. What if I no longer wish to make a Joint Tax Election after I have completed and submitted the Questionnaire?
If you no longer wish to make a Joint Tax Election following completion and submission of the information via the Tax Election Portal, do not file the Joint Tax Election sent to you with the tax authorities. Promptly contact the Technical Assistance Hotline indicated in the instructions provided in the e-mail containing the executed election to notify of your decision to no longer make the Joint Tax Election.
Q15. Is there a fee for making the Joint Tax Election?
No, you are not required to pay any fees to make the Joint Tax Election, provided complete Joint Tax Election Information is provided on or before the Tax Election Portal Closing Date. The CRA and, if applicable, provincial or territorial taxing authorities may levy a penalty for a late filed Joint Tax Election.
Q16. What happens if I do not submit my Joint Tax Election Information by the Tax Election Portal Closing Date?
New BNC has agreed to make a Joint Tax Election with Eligible Canadian Holders, subject to the limitations set out in subsection 85(1) and 85(2) of the Tax Act, only if complete Joint Tax Election Information is provided on or before the Tax Election Portal Closing Date. Therefore, it is important that you provide your complete information by that deadline. New BNC may, but is not obligated to, make a Joint Tax Election if the Joint Tax Election Information is received after the Tax Election Portal Closing Date. Consequently, you should ensure that complete Joint Tax Election Information is received by New BNC in accordance with the procedures set out above by the Tax Election Portal Closing Date. Accordingly, if you wish to make a Joint Tax Election with New BNC you should give your immediate attention to this matter.
Need Help?
Reach out to s85support@taxelection.ca for technical and procedural inquiries with the Tax Election Portal, and consult your own tax advisor for advice about eligibility, forms, elected amounts, deadlines, and filing requirements.