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How do I treat the capital loss or capital gain?

Last updated 5 October 2009

Capital loss

If you made a capital loss you can offset this loss against other capital gains you made in the 2004-05 income year. If you are unable to offset all the capital loss, you can carry the balance forward to offset against future capital gains. You must include these details when completing item 17 on your 2004-05 tax return (supplementary section).

Capital gain

If you made a capital gain on the disposal of your Westfield Holdings shares, you must include it in your calculations when completing item 17 on your 2004-05 tax return (supplementary section).

The method you use to work out the amount to include in your item 17 calculations depends on when you acquired those shares. The following table sets out what method you can use.

If you acquired your Westfield Holdings shares:

You calculate your capital gain using the:

Before 21 September 1999

Indexed cost base or discount method

Note: if you have capital losses to apply against capital gains you made on shares acquired before 21 September 1999, you may want to use the indexation method for some of your shares and the discount method for the others. (For more information, see example of Clare in chapter 2 of the Guide to capital gains tax 2004-05)

After 21 September 1999 and before 2 July 2003

Discount method (after applying any capital losses - including unapplied capital losses from previous years)

On or after 2 July 2003

'Other' method.

* If you choose to index the cost base of shares you acquired before 21 September 1999, you cannot apply the CGT discount when you dispose of them.

For information on the different methods you can use to work out your capital gain, see the Guide to capital gains tax 2004-05.

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

Each Westfield Group stapled security is made up of:

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

For CGT purposes, each element of the stapled security is a separate CGT asset. The initial cost base (and reduced cost base) of each element is a reasonable part of the value of the Westfield Holdings shares exchanged for the stapled securities. The following table gives the initial cost base of each element (worked out based on the net tangible assets attached to each element):


Initial cost base (reduced cost base)


WSF share


$15.48 x 9.09%

WFT unit


$15.48 x 52.39%

WFA unit


$15.48 x 38.52%

Example - Sale facility receiving stapled securities

Amiel acquired 1,000 shares in WSF in June 2002. Immediately before the merger the cost base of his shares was $14.80 per share (total cost base is $14,800).

Amiel chose to exchange his WSF shares for Westfield Group stapled securities. He received 1,000 Westfield Group stapled securities in exchange for his WSF shares. The Commissioner will accept that Amiel's capital proceeds for the exchange of his shares are equal to the volume weighted average price of the Westfield Group stapled securities over the first five trading days. Westfield has advised that this was $15.48.

Calculating the net capital gain

Amiel makes a capital gain on the disposal of 1,000 shares as follows:

Capital proceeds (1,000 x $15.48)


less total cost base (1,000 x $14.80)


Capital gain


Because Amiel had held his shares for more than 12 months, he applies the CGT discount to his capital gain (if he had capital losses he would offset them against his capital gain before applying the discount). Amiel will include a $340 ($680 x 50%) net capital gain on his tax return for the year ended 30 June 2005.

Recording the capital gain on the tax return

Assuming he had no other capital gains and no capital losses for the 2004-05 year, Amiel would complete item 17 on his 2005 tax return (supplementary section) showing:

Did you have a capital gains tax event during the year? Yes

Net capital gain: $340

Total current year capital gains: $680

Working out new cost bases

Amiel will calculate the cost base and reduced cost base of his WSF shares, WFT and WFA units as follows:

  • WSF shares ($1.41 x 1,000) = $1,410
  • WFT units ($8.11 x 1,000) = $8,110
  • WFA units ($5.96 x 1,000) = $5,960