LOK.K Look Communications Sv

TORONTO, March 13, 2012 /CNW/ - Look Communications Inc. ("Look" or the "Company") (NEX: LOK.H; LOK.K) today announced that it has paid the previously announced distribution of an aggregate amount of $6,985,076.20 to the holders of its multiple voting shares and subordinate voting shares, on a pro rata basis, as a return of capital.  Based on the number of multiple voting shares and subordinate voting shares outstanding on the date of this news release, shareholders will receive $0.05 for each multiple voting share and subordinate voting share held.  Cheques have been mailed to registered holders of multiple voting shares and subordinate voting shares. On February 23, 2012, the holders of multiple voting shares and subordinate voting shares approved special resolutions authorizing the Company to reduce the stated capital attributable to the multiple voting shares and the subordinate voting shares for the purpose of a distribution to shareholders in an amount up to the total stated capital of the multiple voting shares and subordinate voting shares. Tax Considerations The following describes the principal Canadian federal income tax considerations under the Income Tax Act (Canada) (the "Tax Act") generally applicable to Shareholders who, for the purposes of the Tax Act, and at all relevant times, hold their multiple voting shares and subordinate voting shares (collectively, "Shares") as capital property and deal at arm's length with, and are not affiliated with, the Company.  Generally speaking, Shares will be considered to be capital property of a Shareholder provided the shareholder does not hold the Shares in the course of carrying on a business of trading or dealing in securities and has not acquired them in one or more transactions considered to be an adventure or concern in the nature of trade.  Certain shareholders who might not otherwise be considered to hold Shares as capital property may, in certain circumstances, be entitled to have them treated as capital property by making the election permitted by subsection 39(4) of the Tax Act. This summary is not applicable to a shareholder: (i) that is a "financial institution" for the purposes of the mark-to-market rules; (ii) an interest in which would be a "tax shelter investment" (iii) that is a "specified financial institution" or (iv) whose "functional currency" is the currency of a country other than Canada, all as defined in the Tax Act.  Such shareholders should consult their own tax advisors with respect to the income tax considerations applicable to their own particular circumstances. This summary is based upon the provisions of the Tax Act in force as of the date hereof and the current published administrative policies and procedures of the Canada Revenue Agency (the "CRA").  Except for specifically proposed amendments to the Tax Act that have been publicly announced by the Minister of Finance (Canada) prior to the date hereof, this summary does not take into account or anticipate changes in the income tax law, whether by legislative, regulatory or judicial action, nor any changes in the administrative or assessing practices of the CRA.  This summary is not exhaustive of all the Canadian federal income tax considerations nor does it take into account or anticipate any provincial, territorial or foreign tax considerations. The Company expects that the "paid-up capital" ("PUC") per share of each of the multiple voting shares and the subordinated voting shares will be substantially in excess of the amount of the distribution per Share.  Moreover, while the matter is not free from doubt, the Company is of the view that the distribution will be made "on the discontinuance, winding-up or reorganization" of Look's business.  No advance income tax ruling has been sought to confirm this conclusion, and accordingly, it is possible that the CRA may take a contrary view.  Resident shareholders should consult their own advisors to understand the tax consequences of the distribution if it is not made "on the discontinuance, winding-up or reorganization" of Look's business, or to the extent that the amount of the distribution exceeds available PUC as those consequences will be different from those described below. Resident Shareholders The following portion of this summary generally is applicable to shareholders who, at all relevant times and for the purposes of the Tax Act, are or are deemed to be residents of Canada (each, a "Resident Shareholder"). The Company is of the view that the amount of the distribution received by a Resident Shareholder will: -- be a tax-free return of capital, and will not be deemed to be a dividend, paid to the Resident Shareholder; and -- reduce the adjusted cost base of its multiple voting shares and subordinated voting shares, respectively, by the amount of the distribution so received in respect of such Shares. In the event that the reduction to a Resident Shareholder's adjusted cost base causes the adjusted cost base to become negative, such negative amount will be deemed to be a capital gain realized by the Resident Shareholder in the taxation year in which the distribution is received.  Generally, one-half of any capital gain (a "taxable capital gain") realized by a Resident Shareholder will be included in the Resident Shareholder's income under the Tax Act for the year in which it is recognized.  Taxable capital gains realized by a Resident Shareholder who is an individual may give rise to minimum tax depending on such Resident Shareholder's circumstances.  A Resident Shareholder that throughout the relevant year is a "Canadian-controlled private corporation" as defined in the Tax Act may be liable to pay a refundable tax of 6⅔% on certain investment income, including taxable capital gains. Non-Resident Shareholders The following portion of this summary generally is applicable to a shareholder who at all relevant times, for the purposes of the Tax Act and any applicable income tax treaty, (1) is not resident, and is not deemed to be resident, in Canada, (2) does not use or hold, and is not deemed to use or hold, the Shares in connection with carrying on a business in Canada, and (3) is not an insurer who carries on an insurance business in Canada and elsewhere (each, a "Non-Resident Shareholder"). The Company is of the view that the amount of the distribution received by a Non-Resident Shareholder will be a tax-free return of capital, and will not be deemed to be a dividend.   Accordingly, a Non-Resident Shareholder will not be subject to Canadian tax on the distribution. The distribution received by a Non-Resident Shareholder will reduce the adjusted cost base of its multiple voting shares and subordinated voting shares, respectively, by the amount of the Distribution so received in respect of such Shares.  In the event that the reduction to a Non-Resident Shareholder's adjusted cost base causes the adjusted cost base to become negative, such negative amount will be deemed to be a capital gain realized by the Non-Resident Shareholder in the taxation year in which the distribution is received.  However, such capital gain will not be taxable under the Tax Act so long as the Shares do not constitute "taxable Canadian property" for purposes of the Tax Act.  The Company expects that the Shares will not constitute "taxable Canadian property" at the time of the distribution.  Non-Resident Shareholders should consult their own Canadian tax advisors in this regard. Forward-Looking Statements Certain statements contained in this news release, including statements regarding the potential tax consequences of the distribution and the timing of receipt of payment by any particular shareholder, constitute forward-looking information within the meaning of applicable Canadian securities laws. The words "may", "attempt", "expect", "will" and similar expressions are intended to identify forward-looking information. Such information reflects Look's current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause actual results that may be expressed or implied by such forward-looking statements to vary from those described herein should one or more of these risks or uncertainties materialize, including, in addition to those described elsewhere in this news release, the tax consequences of the distribution to any particular shareholder and the CRA's interpretation of the provisions of the Tax Act that apply to the distribution.  Except as required by law, Look does not assume any obligation to update or revise the forward looking statements contained in this news release to reflect actual events or new circumstances. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Look Communications Inc. CONTACT: Grant McCutcheon, Director, Look at (416) 613-8222

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