Westfield Holdings Limited ABN 66 001 671 496
Westfield Management Limited ABN 41 001 670 579 AFS Licence 230329
as responsible entity of Westfield Trust ARSN 090 849 746
Westfield America Management Limited ABN 66 072 780 619 AFS Licence 230324
as responsible entity of Westfield America Trust ARSN 092 058 449
How to determine your cost base in
Westfield Retail Trust Stapled Units
Where to find detailed tax information
Details of the income tax and capital gains tax (“CGT”) consequences of the establishment of Westfield Retail Trust for investors who
participated in the transaction are available from the following sources:
1. Australian Taxation Office Class Ruling CR 2010/77 which is available from the Australian Taxation Office.
2. Section 6 – “Tax Information for Westfield Group Securityholders” of the Explanatory Memorandum in relation to the
Establishment of Westfield Retail Trust dated 3 November 2010.
3. Section 9 – “Taxation Implications” of the Product Disclosure Statement for the Westfield Retail Trust Public Offer
dated 3 November 2010.
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How to determine your cost base in
Westfield Retail Trust Stapled Units (continued)
High level summary of the CGT cost base position
Set out below is a general summary of the CGT cost base position in relation to stapled units in Westfield Retail Trust (“WRT”).
The information provided in this summary is not financial product advice or taxation advice. It is general information only and has
been prepared without taking into account your financial circumstances, investment objectives or particular needs. To obtain advice,
you should consult your taxation or other financial adviser.
A WRT Stapled Unit comprises two separate assets for CGT purposes (one unit in Westfield Retail Trust 1 (“WRT1”) and one unit in
Westfield Retail Trust 2 (“WRT2”)). For CGT purposes you need to apportion the cost of each Stapled Unit over the separate assets
that make up the Stapled Unit.
Your initial CGT cost base in each unit will depend on the circumstances of acquisition of the units. The table below summarises the
position (in addition, any incidental costs of acquisition may be included).
Circumstances of Acquisition
WRT1 Unit Cost Base
WRT2 Unit Cost Base
Allocation of cost base of each existing
Westfield Trust unit to the corresponding
WRT1 unit – refer below
The amount of the dividend paid by
Westfield Holdings Limited as part of
the Capital Distribution.
Effectively nil ($0.000000043 per unit)
Capital Distribution
You are a Westfield Group securityholder
who participated in the Westfield Group
Capital Distribution and therefore received
one WRT1 unit for each Westfield Trust
unit held (and one WRT2 unit for each
Westfield Holdings Limited share held)
Westfield Securityholder Offer
You are a Westfield Group securityholder
who participated in the Westfield
Securityholder Offer and therefore you
paid $2.75 per WRT Stapled Unit
Allocation of the $2.75 Offer price as determined under the Constitutions of
WRT1 and WRT2.
$2.74 per unit
$0.01 per unit
Public Offer
You acquired WRT Stapled Units in the
Public Offer and therefore you paid $2.75
per WRT Stapled Unit
Allocation of the $2.75 Offer price as determined under the Constitutions of
WRT1 and WRT2.
$2.74 per unit
$0.01 per unit
Other circumstances
You acquired your WRT Stapled Units
in other circumstances – for example by
purchase on market through the ASX.
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Apportionment of the acquisition price paid. This apportionment should be done
on a reasonable basis. One possible method of apportionment is on the basis
of the relative net tangible assets of the individual trusts. This information will be
available on the WRT website following the June 2011 results announcement.
How to determine your cost base in
Westfield Retail Trust Stapled Units (continued)
Cost base of WRT1 units acquired under the Capital Distribution
Under the Capital Distribution Westfield Group Securityholders received one WRT1 unit for each Westfield Trust unit they
held. As the responsible entities of Westfield Trust and WRT1 have elected to apply capital gains tax rollover relief for the
transfer of the interests in shopping centres from Westfield Trust to WRT1, under the Income Tax Law Westfield Group
securityholders are required to adjust their cost base in the Westfield Trust component of their Westfield Group stapled
security to, in effect, allocate part of this cost base to their cost base in their WRT1 units.
The Australian Taxation Office has accepted the following allocations:
1.the adjusted cost base of each Westfield Trust unit just after the transaction is 59% of the cost base of that Westfield
Trust unit just before the transaction.
2.the cost base of each WRT1 unit just after the transaction is 41% of the cost base of the corresponding Westfield Trust
unit just before the transaction.
The Australian Taxation Office has also confirmed that each WRT1 unit acquired is taken for CGT purposes (including for
the purposes of the determining eligibility for the CGT discount) to have been acquired at the time of acquisition of the
corresponding Westfield Trust unit.
Steps to determine cost base of WRT1 units
1.Determine your holding of Westfield Group stapled securities on the record date for the Capital Distribution –
17 December 2010
2.Determine the cost base as at 20 December 2010 of the Westfield Trust unit which is a component part of each
Westfield Group stapled security held. This will involve:
a. Determining the original cost base of each Westfield Group stapled security held.
b.Apportioning the original cost base of the Westfield Group stapled security between the Westfield Trust unit
component, the Westfield America Trust unit component and the Westfield Holdings Limited share component.
This should be done on a reasonable basis and could be done using the relative net tangible assets (“NTAs”) of the
individual entities at the time of acquisition of the Westfield Group stapled securities. The relative NTAs for each 6
month period are available on the Westfield Group website at the following link:
www.westfield.com/corporate/investor-services/wdc-securityholding-information/taxation-information.html
c.Reducing the amount apportioned to each Westfield Trust unit by any tax deferred distributions received from
Westfield Trust between your original acquisition date and 20 December 2010.
3.
Your adjusted cost base in each Westfield Trust unit is 59% of its cost base determined under step 2.
4.
Your cost base in each WRT1 unit is 41% of the cost base of the corresponding Westfield Trust unit.
Note, if your cost base in a Westfield Trust unit is nil (for example, due to the receipt of tax deferred distributions exceeding
your original cost base) your cost base in the corresponding WRT1 unit is also nil.
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How to determine your cost base in
Westfield Retail Trust Stapled Units (continued)
Example
Assume you acquired 1,000 Westfield Group stapled securities for $12.00 (including any incidental costs) in November 2010.
As part of the Capital Distribution you received 1,000 WRT1 units and 1,000 WRT2 units.
Step 1 – you held 1,000 Westfield Group stapled securities on the record date
Step 2a – your cost base in each Westfield Group stapled security is $12.00
Step 2b – based on the relative NTAs as at 30 June 2010, the cost base of each component of each Westfield Group stapled
security is set out below:
Entity
Westfield
Holdings
Westfield
Trust
Westfield
America Trust
Westfield
Group Total
3.15%
74.54%
22.31%
100%
$0.38
$8.94
$2.68
$12.00
Relative NTA at 30 June 2010
Apportionment of cost base
Source: Westfield Group NTA table available on the Westfield Group website at the following link:
www.westfield.com/corporate/investor-services/wdc-securityholding-information/taxation-information.html
Therefore the cost base of each Westfield Trust unit is $8.94.
Step 2c – the only tax deferred distribution received from Westfield Trust is the Capital Distribution of $0.000000043 per unit as
part of the transaction. As this is substantially less than 1 cent no actual cost base reduction is required and your cost
base in each Westfield Trust unit just prior to the transaction is $8.94.
Step 3 – your adjusted cost base in each Westfield Trust unit is 59% of $8.94 = $5.27
Step 4 – your cost base in each WRT1 unit is 41% of $8.94 = $3.67
Information for the purposes of section 126-260 of the Income Tax Assessment Act 1997
The following information is required to be given by the responsible entity of Westfield Trust to Westfield Group securityholders
who participated in the Capital Distribution:
a)
the transfer time is 20 December 2010
b)
under the Capital Distribution, Westfield Group securityholders received one WRT1 unit for each Westfield Trust unit held
c)
the ATO has accepted the following reasonable approximations of market value:
–the value of a Westfield Trust unit immediately before the transfer time is equal to the net asset value per
Westfield Trust unit as at 30 June 2010 of $7.82.
–the value of a WRT1 unit immediately after the transfer time is equal to the pro forma net asset value per
WRT1 unit of $3.20.
–
the value of a Westfield Trust unit immediately after the transfer time is $4.62.
Westfield Group 2011 Tax Guide and Tax Statement
The above information and details of the components of the distributions paid by the Westfield Group in respect of the 2010
calendar year will be set out in the 2011 Tax Statement and Tax Guide which will be sent to Members in July 2011.
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