How do I treat the non-assessable payment?

You received a non-assessable payment of $1.01 per consolidated Westfield Trust unit.

This amount reduces the cost base of your units. If the cost base of your consolidated units was less than $1.01 per unit, you would make a capital gain of $1.01 minus the cost base for each unit. You cannot make a capital loss on the receipt of a non-assessable payment.

The following table will help you:

For Westfield Trust units with a	you have made	equal to	You must reduce the cost base of your consolidated units
cost base greater than $1.01 per unit	no capital gain (or loss)	-	by $1.01 per unit
cost base equal to $1.01 per unit	no capital gain (or loss)	-	to nil
cost base less than $1.01 per unit	a capital gain	$1.01 minus the cost base of the unit	to nil

How do I work out the cost bases of the elements of the stapled securities that I received?

Each Westfield stapled security is made up of:

• one Westfield Holdings Limited (WSF) share
• one Westfield Trust (WFT) unit, and
• one Westfield America Trust (WFA) unit.

For CGT purposes, each element of the stapled security is a separate CGT asset. The non-assessable payment that you received was compulsorily used to purchase one WSF share and one WFA unit for each WFT unit that you held. Under this arrangement the purchase price of the WSF shares was $0.01 per share and the purchase price of the WFA units was $1.00 per unit. The following table gives the cost base (reduced cost base) of each element of your new stapled securities immediately after the stapling arrangement was completed:

Element	Initial cost base (reduced cost base)
WSF share	$0.01
WFT unit	Cost base of consolidated units after the non-assessable payment - as per the previous table
WFA unit	$1.00

Example - staple

Jayne acquired 1,000 units in WFT in June 2003. Immediately before the merger, the cost base of her units was $3,530 (or $3.53 per unit). Jayne's units were consolidated as the first step of the stapling arrangement. After consolidation, she held 280 (1,000 x 0.28) units with a cost base of $3,530 (or approximately $12.61 per unit).

Jayne's WFT units participated in the stapling arrangement. Jayne received a non-assessable payment of $282.80 ($1.01 x 280). This payment will reduce the cost base of her consolidated WFT units. As it is less than the cost base of these units, it will not result in a capital gain to Jayne.

Note: This non-assessable payment was compulsorily applied to buy WSF shares and WFA units, which were stapled with her units to make up Westfield securities.

Working out new cost bases

Jayne retains her consolidated WFT units at their original cost base less the amount of the non-assessable payment. She has acquired new WSF shares at the cost of $0.01, and WFA units at the cost of $1.00 each. The cost base of each of the elements of Jayne's Westfield securities immediately after the stapling arrangement was completed on 16 July 2004 was as follows:

There are no CGT consequences for Jayne as a result of the stapling of each WFT unit to each new WSF share and WFA unit.