Westfield Group and Westfield Retail Trust Restructure June 2014

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Note

BGL do not provide accounting or taxation advice. The following is designed to act as a guide for Simple Fund 360 users. It is not designed to be accounting or tax advice and should not be taken as a strict guideline. Other methods that are more suitable may be used instead of these steps.

 

The Westfield Group Restructure was implemented on 30 June 2014 (Implementation Date). This restructure resulted in the creation of two new listed property groups, Westfield Corporation (WFD) and Scentre Group (SCG).

Westfield Group Restructure


The Westfield Group (WDC) has been restructured into Westfield Corporation (WFD) and Scentre Group (SCG)

After implementation of the restructure, WDC securityholders received 1 stapled security in WFD and 1.246 securities in SCG for every unit they held prior to the Implementation Date.

Prior to processing the corporate action, ensure the following are completed:

  • All transactions related to WDC have been correctly entered in SF360. You can check your investment reports to see if the current holdings are correct.
  • All Trust Distribution information from the 2013/2014 Annual Tax Statement has been entered. For more information on how to enter distributions in SF360, refer to the How to Enter a Distribution help.

 

Scenario:

Prior to the restructure, the fund held 1,000 WDC units originally acquired on 12/12/2004 at $10 each.

Cost = $10,000

  1. If you have tax deferred amounts, you need to adjust the cost base by that amount.
    Refer to Points 40 and 41 in ATO Class Ruling CR 2014/78.
  2. This scenario is using the roll-over relief.
  3. Your scenario may be different to this one. Ensure you review the cost base of your shares before proceeding.

 

Step 1 - Dispose of the WDC units at cost and record the acquisition of WFD units


To dispose of the units at cost, you need to untick the Asset subject to CGT box in the Chart of Accounts:

  1. Go to the Chart of Accounts and locate 78200/WDC.

    Click on the investment to edit the account and select More Details>>.

  2. Untick the Asset subject to CGT box.

 

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From the Transaction List, you need to record the disposal of WDC units at cost and the acquisition of the WFD units.

For the acquisition of WFD units, the contract date should be changed to when the original WDC units were purchased (12/12/2004 in this example).

 

Step 2 - Process a demerger


This FAQ uses the following cost split from Page 4 of the How To Determine Your Cost Base in Scentre Group Stapled Securities and Westfield Corporation Stapled Securities document:

WFD 63.62%  ($6.362/$10 x 100%) 
SCG  36.38%
 More info regarding the cost split >>>

Page 4 - It is mentioned that the WDC cost per unit was $10.

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  1. From the Transaction List screen, select New Transaction | Corporate Action. You will be taken to the New Corporate Action screen.

  2. Select WFD from the Select Securities drop-down list.



  3. Select Demerger from the Select Corporate Action drop-down list.

  4. Under Corporate Action Details, enter the details of the demerger.

    If you select SCG from the Select Securities drop-down list next to Select Demerged Security and the message: Can not find a chart according to this security appears, this means that you do not have SCG as an investment for this fund. You will need to select Add New Investment and add SCG as an investment account in the fund.

     



  5. Review the Corporate Action Summary panel and ensure the details are correct.

  6. Select Process and the demerger transaction will be posted to the Transaction List.

  7. Review your investment reports to check if the current investment holdings and costs are correct.
     

Record any tax deferred that was attached to WDC to the new investments. Refer to the How to Enter a Distribution help for more information.

Westfield Retail Trust Restructure


The Westfield Retail Trust (WRT) has been restructured into Scentre Group (SCG).

The restructure involved a return of capital of $0.2853 for each WRT unit held.

After implementation of the restructure, WRT securityholders received 0.918 stapled security in SCG for every WRT unit held.

Prior to processing the corporate action, ensure the following are completed:

  • All transactions related to WRT have been correctly entered in SF360. You can check your investment reports to see if the current holdings are correct.
  • All Trust Distribution information from the 2013/2014 Annual Tax Statement has been entered. For more information on how to enter distributions in SF360, refer to the How to Enter a Distribution help.

Scenario:

Prior to the restructure, the fund held 1,000 WRT units originally acquired on 12/12/2010 at $3.20 each.

  1. If you have tax deferred amounts, you need to adjust the cost base by that amount.
    Refer to Page 2 of the How To Determine Your Cost Base in Scentre Group Stapled Securities document.
  2. This scenario is using the roll-over relief.

 

Step 1 - Record a Return of Capital


Return of capital = $0.2853 per unit held = $0.2853 x 1000 = $285.30

From the Transaction List screen, select New Transaction. From the drop down list, select Bank Statement.

You will need to record the following transaction:

 

You have to input "0" in the Units field and should not leave the field blank. Otherwise, this will be treated as a manual revaluation by SF360.

 

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Click on the More icon to display the Return of Capital Details screen.

(Click on the image for full size view)

 

Step 2 - Dispose of WRT units and record acquisition of SCG units


To dispose of the units at cost, you need to untick the Asset subject to CGT box in the Chart of Accounts:

  1. Go to the Chart of Accounts and locate 78200/WRT.
  2. Click on the investment to edit the account and select More Details>>.
  3. Untick the Asset subject to CGT box.

You can then go to the Transaction List to record the disposal of WRT units and the acquisition of the SCG units.

Consideration = Number of units x (Original Cost - Return of Capital amount) = 1000 x ($3.20 - $0.2853) = $2,194.70

Acquisition - Total cost base for 918 SCG units = $2,194.70

(Click on the image for full size view)

 

For the acquisition of SCG units, the contract date should be changed to when the original WRT units were purchased (12/12/2004 in this example).

Select Post to add the transaction and return to the Transaction List screen.

Record any tax deferred that was attached to WRT to the new investment. Refer to the How to Enter a Distribution help for more information.

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