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.
Details
Under the Entitlement Offer, eligible WBC shareholders are entitled to acquire 1 new share for every 23 existing fully paid ordinary shares held as at 19 October 2015 (Entitlement).
The way you process this offer in Simple Fund 360 will depend on which option the trustees of the fund have chosen.
| Option | If the trustees: | You will need to: |
|---|---|---|
| 1 | Took up all or part of the Entitlement |
Enter a purchase transaction for the new shares. See Option 1. |
| 2 | Sold all or part of the Entitlement |
Enter a purchase for the ASX code: WBCR with a cost base of $0 and sell the Entitlement for the amount received. See Option 2. |
| 3 | Transfer all or part of the Entitlement to another person or entity other than on ASX |
Enter a purchase for the ASX code: WBCR with a cost base of $0 and sell the Entitlement for the amount received. See Option 2. |
| 4 | Did not exercise or sell the Entitlement and received a premium at the end of the process |
Option A: Treated as a Capital Gains Enter a purchase for the ASX code: WBCR with a cost base of $0 and sell the Entitlement for the amount received. See Option 3. Option B: Treated as Unfranked Dividend or Other Income If the tax treatment in TR 2012/1 should be applied, record the premium as either an unfranked dividend or other income. See Option 3. |
For more information, refer to the following documentation:
Example
The fund held 1000 WBC shares as at 19 October 2015.
The number of shares the fund is entitled to is 44 (1000/23) (Rounded to the nearest whole number of new shares - See Retail Entitlement Offer Booklet Pg 13).
The offer price is $25.50 (See Retail Entitlement Offer Booklet Pg 13).
The trustees have exercised the Entitlement
In this scenario, the fund held 1000 WBC shares as at 19 October 2015.
Therefore, the fund is entitled to 44 new shares (1000/23).
Go to Accounting | Transaction List and process a purchase transaction for the new 77600/WBC shares at the discounted price.
If the settlement date is different to the contract date, you can change the dates by selecting More to access the Investment Purchase Details.
The trustees have sold the Entitlement
- Go to Accounting | Transaction List and process a purchase for the ASX Code:WBCR with a cost base of $0.
- From the Transaction List screen, process a disposal to sell the entitlements for the amount received as per specified in the WBC advice. Simple Fund 360 will calculate the proceeds as capital gains.
The trustees did not exercise or sell their Entitlement and received a premium
The premium received per entitlement is $4. See WBC ASX Announcement - Retail Shortfall Bookbuild.
There are two possible ways to record this:
- Option A - Treated as Capital Gains
- Option B - Treated as Unfranked Dividend or Other Income
Option A - Treated as Capital Gain
If ATO Taxation Ruling 2012/1 does not apply as the Entitlements are tradeable on ASX (Pg 52 of the Retail Entitlement Offer Booklet), you will need to do the following:
- Process a purchase of the Entitlements with a cost base of $0
- Sell the rights for the amount received
The transactions will be similar to Option 2.
Option B - Treated as Unfranked Dividend or Other Income
If the tax treatment in ATO Taxation Ruling 2012/1 should be applied, you can record the premium as either an unfranked dividend or other income.
For example,
