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Historical Bell Aliant information

Tax information

Common shares of Bell Aliant Inc. (previously Bell Aliant Regional Communications Income Fund) began trading on the Toronto Stock Exchange on January 4, 2011. Prior to such date, shares traded as units of Bell Aliant Regional Communications Income Fund under BA.UN ticker. Tax information with respect to distributions made by Bell Aliant Regional Communications Income Fund can be found here.

For Canadian Residents

The following information is intended to assist individual shareholders of Bell Aliant Inc. ("Bell Aliant") who are resident in Canada. Please check back frequently for updates.

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 dividends received from Bell Aliant.

For U.S. and other non-resident shareholders, 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 Bell Aliant shares. Moreover, the income and other tax consequences of acquiring, holding or disposing of Bell Aliant shares will vary depending on the shareholder'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 Bell Aliant shares. Investors should consult their own tax advisors for advice with respect to the tax consequences of an investment in Bell Aliant shares based on their particular circumstances.

Dividends and Capital Gains on your Bell Aliant Shares

Eligible dividends
Bell Aliant common shareowners may be subject to tax on dividends, which are generally taxed more favorably than other types of income. Unless otherwise stated, dividends paid by Bell Aliant to Canadian residents are eligible dividends as defined by subsection 89(1) of the Canadian Income Tax Act (Tax Act) and analogous sections of provincial tax legislation. Under this legislation individuals resident in Canada may be entitled to enhanced dividend tax credits that reduce the income tax otherwise payable.

Bell Aliant common shareowners are also required to pay tax on any capital gains they realize when they sell their shares or are deemed to have sold them. Our section dealing with Archived Information contains information about how you should calculate the cost of your shares.

Taxation rates vary by jurisdiction and individual circumstances. You should consult your own tax advisor if you need more information.

Bell Aliant Inc. Common Shares will be qualified investments under the Tax Act for trusts governed by registered ("RRSP") retirement savings plans ("RSP"), registered retirement income funds (RRIF"), deferred profit sharing plans (DPSP"), registered education savings plans, registered disability savings plans and tax-free savings accounts ("TFSA").

Shares held within a TFSA: If Bell Aliant shares are held within a TFSA the dividends received from Bell Aliant will not be taxable to the individual Canadian resident shareholder. Funds withdrawn from a TFSA will not be taxable.

Shares held within an RRSP, RRIF, or DPSP: If Bell Aliant shares are held within an RRSP, RRIF or DPSP, the dividends received from Bell Aliant will not be taxable to the individual Canadian resident shareholder, until funds are withdrawn from the RRSP, RRIF or DPSP.

Tax Slips: Individual Canadian resident shareholders, who hold their shares outside of an RRSP, RRIF, DPSP or TFSA and who have received dividends during a particular calendar year, will receive a T5 slip by the last day of February of the following year, which is the filing deadline legislated under the Income Tax Act (Canada). Shareholders who hold their shares through a broker will receive the T5 slip from their broker. Registered shareholders will receive the T5 slip from our transfer agent CIBC Mellon Trust Company. Shareholders who are resident in the province of Quebec on December 31 of the particular calendar year will also receive a Relevé 3 slip. Unless otherwise notified, all of the dividends will be designated as eligible dividends.

Tax information for U.S. Residents and other Non-Residents of Canada

Dividends on Bell Aliant shares paid or credited to non-residents of Canada are subject to a 25% withholding tax unless reduced by treaty. Under current tax treaties, U.S. and U.K. residents are subject to a 15% withholding tax. For additional information, please consult your tax advisor.

US Investors
Bell Aliant is required to solicit taxpayer identification numbers (TIN) and IRS Form W-9 certifications of residency from certain U.S. investors. Where these have not been received, Bell Aliant may be required to deduct the Internal Revenue Service's specified backup withholding tax. The backup withholding rate on dividends is currently 28%. Shareholders who did not provide their TIN and W-9 certification of residency and had the backup withholding tax applied on their dividends can obtain a refund or credit against their U.S. federal income tax through the filing of their income tax return the following year. For additional information, please contact your tax advisor.

Under the Jobs and Growth Tax Reconciliation Act of 2003, dividends paid to US individuals by most US public companies and qualifying foreign corporations, including public Canadian companies such as Bell Aliant, will constitute "qualified dividend income" eligible for the preferential tax rate for individuals that meet certain requirements (including a minimum holding period requirement). For this purpose, qualified dividend income generally includes dividends paid by a foreign corporation if, among other things, the corporation is not considered during the year the dividend is paid, or in the preceding year, a passive foreign investment company ("PFIC") for U.S. federal income tax purposes, and the corporation is eligible for the benefits of a comprehensive tax treaty with the United States that the IRS determines is satisfactory for purposes of the provision reducing the rate of tax on dividends, and that includes an exchange of information program. The U.S. Treasury Department has determined that the Convention between the United States of America and Canada with respect to Taxes on Income and Capital meets the requirements described above, and Bell Aliant Inc. believes that it is eligible for the benefits of the treaty. A non-U.S. corporation will generally be classified as a PFIC for U.S. federal income tax purposes for any taxable year during which either (i) at least 75 per cent of the corporation's gross income is ''passive income'' or (ii) on average, at least 50 per cent of the gross value of the corporation's assets is attributable to assets that produce passive income or are held for the production of passive income. Bell Aliant Inc. believes that it is not currently, and is not likely to become in the near future, a PFIC; however, no assurance can be given in this regard.

The foregoing is for general information purposes only, and your tax consequences may vary depending on your particular circumstances. You are urged to consult your tax advisor to determine your particular tax consequences and filing obligations arising from your ownership of common shares of Bell Alliant Inc.

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