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Article 211: Westfield Group Stapled Securities |
| Article Description |
Explanation of how to deal with the Westfield Group Stapled Securities |
| Article Location(s) |
Simple Fund: Corporate Actions
|
| Article Addition Added |
27/01/05 |
| Article Last Updated |
01/11/07 |
| Software Version |
Simple Fund 10.1 or earlier |
Article Details |
Westfield Group stapled securities comprises of:
1. Westfield Holdings Share (WH)
2. Westfield Trust Unit (WT)
3. Westfield America Trust Unit (WA)
The stapled securities will trade together as one entity on the ASX under the code "WDC".
The number of stapled securities you hold for each securities will be calculated based on the merger ratio below with each holding being rounded UP to the next whole number.
1. 1 stapled security for each Westfield Holdings share held on the 12 July 2004
2. 0.28 stapled securities for each Westfield Trust unit held on the 12 July 2004
3. 0.15 stapled securities for each Westfield America Trust unit held on the 12 July 2004.
WH, WT and WA will remain as separate assets for Australian tax purposes. You will need to maintain the cost base of each of the separate securities. Where the sale of Stapled Securities occurs, the sale price will also need to be apportioned over the three separate securities on a reasonable basis. One possible method of apportionment is on a net tangible asset (NTA) basis. All investors should seek independent professional advice based on their own particular circumstances. |
Article Solution |
Summary of steps to be done in Simple Fund
1. Renaming the descriptions of every transactions in each security for the purpose of maintaining them as separate assets.
2. Calculate the holdings of each share held as of 12 July 2004 based on the merger ratio.
3. Transfer all the transactions from WT and WA to WH
4. Reattach the new security code "WDC" to the WH security.
BGL recommend that clients set up one linked Distribution Account under the 238 Control Account for the Westfield Group Stapled Stapled Security. Users then have the choice whether to input the franked and unfranked amounts in the distribution to account 238. If the franked and unfranked amounts are input, Simple Fund will automatically allocate the appropriate amounts to Labels D, J and K in the Income Tax and Regulatory Return. If these amounts are not input and only the imputed credit amount is input, then this amount is simply added to Label X Trust Distributions.
Note: This example does not require you to add a new account for the Westfield Group Stapled Security, but rather, change the existing Westfield Holdings Share (WH) to the Westfield Group Stapled Security (Step 4). This means that there is already an income account set up for this investment, therefore, you will simply edit the existing 239/XXX account and change the Tax Return Label to Income from Trusts (X).
STEP 1: Maintaining each security as a separate asset for tax purpose
1. Click into Fund Details, Reporting Tab and temporarily change the Financial Year. Change the START and END dates to include all Westfield transactions from the first initial purchase date till current. Click SAVE.
2. Click into Transaction screen. Click on the drop down box for transaction filter and select Sub Account. Put in the account code for WH and click the filter button (green icon).
3. Double click into each of the transactions and add to the description that this transaction is originally from WH.
4. Repeat steps 1 to 3 above for WT and WA
STEP 2: Calculate holdings based on Merger Ratio
Example: Client holds 1500 units of WH, 808 units of WT and 1500 units of WA before the merger. Refer below on how to calculate holdings after merger date.
Westfield Holdings Share (WH)
Since the ratio is 1 to 1, there is no change to the number of holdings. As of 12 July 2004, client will hold 1500 units of WH.
Westfield Trust Units (WT)
The merger ratio is 0.28 stapled securities for each Westfield Trust unit held on the 12 July 2004. Remember that each holding must be rounded UP to the next whole number.
808 units x 0.28 = 226.24
As of 12 July 2004, client will hold 227 units of WT
To change the number of units from 808 to 227, you will need to go into the Transaction screen, Click on  Additional Functions| Transaction Type| Consolidation. Select the security from the chart of accounts and input the new number of units, 227, input the transaction date as 12 July 2004 and DO NOT tick round amounts. Then click on the blue tick to accept the changes made.
Note: If you have multiple purchases of WT, you will need to apply the ratio on each transaction and round up the holdings. Lastly, total up the holdings for this security and input the total as the new number of units in the consolidation process.
Westfield America Trust Unit (WA)
1500 x 0.15 = 225
As of 12 July 2004, client will hold 225 units of WA
To change the number of units from 1500 to 225, you will need to go into Transaction screen, Click on Additional Functions| Transaction Type| Consolidation. Select the security from the chart of accounts and input the new number of units, 225, input the transaction date as 12 July 2004 and DO NOT tick round amounts. Then click on the blue tick to accept the changes made.
Note: If you have multiple purchases of WA, you will need to apply the ratio on each transaction and round up the holdings. Lastly, total up the holdings for this security and input the total as the new number of units in the consolidation process.
STEP 3: Transfer WT and WA to WH
Click into Transaction screen, click on the Additional Functions| Replace/Change Account as we are now ready to change the account codes for WT and WA postings to the stapled security account code WH.
Input the old account code which is WT and choose the new account code as WH. Do NOT tick the checkbox for "Update account code for selected transactions only?" Change the period START and END dates to include all WT transactions from the first initial purchase date till current.
Then click the blue tick to accept the changes. Repeat this step for WA if applicable.
STEP 4: Attaching "WDC" code to WH and change the name of this account to Westfield Group Stapled Securities
Go to Chart of Accounts, and double click into WH. Change the Account name to Westfield Group Stapled Securities and click into security search button and attach WDC as the new security. Click SAVE. If the security is not in the security list (security prices have not been updated) then please create a new WDC security code and attach to WH Account.
Refer to Ariticle 276: How to Record Stapled Securities for more information in relation to stapled securities. |
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