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How do I treat the dividend?

Last updated 5 October 2009

You received a fully franked dividend of 0.2 cents and a franking credit of approximately 0.086 cents per share.

Note: The exact amount of the franking credit that you received is on the notice that you received regarding the stapling arrangement.

If you are entitled to the franking credit, include both the franked dividend amount and the franking credit in your income for the 2004-05 income year - show them at item 11 on your tax return. (You will find the amounts on your dividend statement.) You automatically receive a tax offset equal to the franking credit when we process your return.

If you are not entitled to the franking credit, do not include it as income at item 11. You may not be entitled to the franking credit if you acquired your shares after 25 February 2005 (because of the 45-day holding rule). You are exempt from this rule if your total franking tax offset entitlements for the year are less than $5,000.

Refund of franking credits

A franking credit reduces the amount of tax you must pay. You may be entitled to a refund of any franking credit in excess of the tax you must pay; if so you will receive a credit for the excess when you lodge your tax return. If you are not required to lodge a tax return for the 2004-05 income year, Refunding franking credits - individuals explains how to get the refund without lodging a tax return.

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 dividend that you received was compulsorily used to purchase one WFT unit and one WFA unit for each WSF share that you held. The purchase price of both units was $0.001 each. 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:


Initial cost base (reduced cost base)

WSF share

Cost base of original shares at stapling time

WFT unit


WFA unit


Example - staple

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

Maude did not chose to exchange her shares for Westfield Group stapled securities. Her shares were therefore involved in a stapling arrangement. Maude received a franked dividend of $2 ($0.002 x 1,000). Her dividend statement showed a fully franked dividend of $2 and a franking credit of $0.86.


This dividend was compulsorily applied to buy WFT and WFA units, which were stapled with her shares to make up Westfield securities.

Recording the dividend on the tax return

On her tax return for the 2004-05 income year, Maude includes both the franked dividend of $2 and the franking credit of $0.86 in her assessable income (at item 11). (When her tax return is processed, the Tax Office automatically also allows her the franking credit as a tax offset, which reduces her tax payable.)

Working out new cost bases

Maude retains her WSF shares at their original cost base. She has acquired new WFT and WFA units at the cost of $0.001 each. The cost base of each of the elements of Maude's Westfield Group stapled securities immediately after the stapling arrangement was completed on 16 July 2004 were as follows:

  • WSF shares ($14.80 x 1,000) = $14,800
  • WFT units ($0.001 x 1,000) = $1
  • WFA units ($0.001 x 1,000) = $1

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