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
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.
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