Security Price Apportionment

If you are an Australian resident and hold your Liberty Securities on capital account, the capital gains tax (CGT) rules may apply to the disposal of your Securities.

A Liberty Security comprises one Share in Liberty Financial Group Limited (LFG) and one Unit in Liberty Financial Group Trust (LFGT). For CGT purposes, a Share in LFG and a Unit in LFGT are separate assets. For CGT purposes, the disposal of Securities will involve the disposal of two separate assets – a Share and a Unit. The tax consequences must be worked out separately for each.

As the components of the Securities cannot be acquired or traded separately, it is necessary to:

  • Apportion the purchase price of a Security between a Share and a Unit; and
  • Apportion the sales proceeds of a Security between a Share and a Unit.

The apportionment must be done on a reasonable basis.

There are many different ways to apportion purchase price and sales proceeds between a Share and a Unit.

According to the Australian Taxation Office, one reasonable basis of apportionment is to have regard to the portion of the value of the stapled security that each Security represented.

Refer: Stapled securities | Australian Taxation Office (ato.gov.au)

One possible approach is to determine the portion of the value of Liberty Securities that a Share and a Unit represents by the relative contribution of cash flows and market capitalisation of LFG and LFGT.

The table below applies this method of apportionment for those Australian resident holders of Liberty Securities that wish to apply this approach.

Date Share Unit
31 December 2020 41% 59%
30 June 2021 45% 55%

The information provided is not financial product advice or taxation advice. It is general information only. You should seek independent advice to determine the taxation consequences applicable to your circumstances.

© Liberty Financial Group Limited (ACN 125 611 574) and Liberty Fiduciary Ltd (ACN 119 884 623).