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Establishment of WRT - December 2010

Establishment of WRT

In 14 December 2010, the Westfield group (WDC) established Westfield Retail Trust (WRT). It was effected through a pro-rata distribution of units in the new trust to Westfield Group security holders equating to a capital distribution of $7.3 billion. WDC security holders received 1 WRT share for every 1 WDC held.

The cost base split between WDC and WRT needs to be calculated.

To determine the appropriate cost base of WRT, the following assumptions regarding the WDC security holdings have been made:

WDC Shares: 1000
Trade date: 30/07/2008
Price: $10
Broker: $100.00
Total Cost: $ 10,100

A. Deriving the WRT cost base percentage

a. Find the appropriate NTA of Westfield Trust (WFT) from the table below. This is the NTA of WFT on the date closest to the purchase date of WDC shares. In this example, the relevant WFT NTA is 65.29% on 30 Jun 08 as it is the closest to the purchase date of 30 Jul 08

 

Date

Westfield Trust

   

31 Dec 10

67.27%

30 Jun 10

74.54%

31 Dec 09

74.59%

30 Jun 09

71.32%

31 Dec 08

65.72%

30 Jun 08

65.29%

31 Dec 07

62.46%

30 Jun 07

59.22%

31 Dec 06

58.43%

30 Jun 06

54.90%

31 Dec 05

51.66%

30 Jun 05

51.95%

31 Dec 04

49.86%

 

 

  b. WRT cost base percentage is 41% of the WFT NTA per ATO. In this example, it is 26.77% = 65.29% x 41%

B. Next, we need to derive WDC cost base percentage. In this example, WDC cost base is 73.23%= 100% less 26.77% (WRT cost base as computed in b.)

C. Enter the transaction in Stock Doctor
  a. Under portfolio director, click on the portfolio containing WDC. It will take you to another screen.
  b. Under securities held, click on WDC. It will take you to the WDC screen.
  c. Under Trades and Adjustments, click on New Reconstruction
new_rec.PNG
  d. In the window that will open, enter the following information in the General tab.

Date : 14/10/2010
No. shares to participating: 1000

New holding for which rollover relief applies
Code : WDC
Quantity: 1000
Cost base rolled over (%): 73.23

Click the (+) button.

Code : WRT
Quantity: 1000
Cost base rolled over (%): 26.77

  e. Click on Save.
22234344.PNG

D. You may now proceed with the instructions pertaining to the formation of WFD from WDC by clicking the link here  and the formation of SCG from WRT by clicking the link here 

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