PERLS of wisdom and Westfield/Scentre Group

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Question: In my SMSF at 30 June 2014, we held 2,000 Westfield Group (WDC). Under our entitlement, we received 2,492 Scentre Group, plus 2,000 Westfield Corp. Having since sold the 2,492 Scentre, I need to know the cost base for the entitlement. Have tried reading the 400-odd page Westfield document but still none the wiser. Can you help please?

Answer (Paul Rickard): Thanks for the question.

If you look at page 329 in the Explanatory Memorandum, there is an explanation of the general taxation principles.

In essence, your existing cost base for your former Westfield Shares will be apportioned between the 2,000 new shares in Westfield Group (WFD) and the 2,492 units you received in Scentre (SCG).

Westfield/Scentre are awaiting an advice/ruling from the ATO about this – which is allegedly due at the end of August.

This advice will be communicated when received (and available on their websites), and hopefully, will have a reasonably straight-forward method of apportioning your previous cost base.

Question 2: Thanks for your good cover on PERLS. I would like to ask, as you have not covered it, if it is worthwhile to convert PERLS V to VII? And what if we don’t?

Answer 2 (Paul Rickard): Thanks for the question.

If you don’t convert the stock, then Commonwealth Bank will redeem the PERLS V from you by paying you the face value of $200 per Note. You will receive this, plus the quarterly distribution of $2.1367, on 31 October.

You are under no obligation to convert your PERLS V to PERLS VII – however if you don’t, what are you going to do with these funds?

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

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