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Tax Report Guide Inside this guide Structure of your Account Understanding your Tax Report Explanations and limitations Completing your Tax Return For the year ended 30 June 2012

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Page 1: Tax Report Guide - asgardeofy.com.au€¦ · Tax Report Guide | 1 Important information While every care and effort has been taken in the preparation of this Guide and the Tax Report,

Tax Report Guide | A

Tax Report Guide

Inside this guideStructure of your Account

Understanding your Tax Report

Explanations and limitations

Completing your Tax Return

For the year ended 30 June 2012

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B | Tax Report Guide

Asgard Capital Management Ltd ABN 92 009 279 592 AFSL 240695Correspondence to: Asgard Capital Management PO Box 7490 Cloisters Square WA 6850Telephone 08 9415 5048 Facsimile 08 9481 4834Contact Centre 1800 998 185

AbbreviationsThe following abbreviations are used throughout this Tax Report Guide.ABN — Australian Business NumberAccount — the Asgard account(s) for which you have received a Tax Report‘Asgard’, ‘we’ or ‘us’ — Asgard Capital Management LtdAFSL — Australian Financial Services LicenceATO — Australian Taxation Office CGT — Capital Gains Tax Guide — this Asgard Tax Report GuideInvestor Report — the Investor Report(s) you have received for your Account Non-resident — refers to an Australian non-resident for tax purposes St.George Bank — St.George Bank is a division of Westpac Banking Corporation ABN 33 007 457 141 AFSL 233714 (Westpac)Tax Report — the Annual Tax Report you have received for your AccountTax Return — the Individual Tax Return 2012 (including supplementary section) TFN — Tax File NumberRITC — Reduced Input Tax Credit

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Tax Report Guide | 1

Important informationWhile every care and effort has been taken in the preparation of this Guide and the Tax Report, no liability is accepted by Asgard Capital Management Ltd, ABN 92 009 279 592 AFSL 240695, its related companies or any of their officers or employees for any statements, opinions, errors or omissions, even if made negligently, contained in the Guide and any damages or losses suffered as a result. The information in this Guide is general information and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretations as at 30 June 2012. Your individual situation may differ and we strongly recommend you consult your financial accountant or tax adviser should you require information about your personal tax position. This Guide is not intended to be a substitute for the ATO instructions and should be read in conjunction with them.

AcknowledgementTax Return excerpts and references to Tax Return labels in this Guide are taken from the following documents issued by the ATO.• Tax Return for individuals 2012• Tax Return for individuals (supplementary section) 2012.

hat’s insideAsgard Tax Report Guide 2 About this Guide

3 About your Account

4 Understanding your Tax Report

4 Structure of the Tax Report

5 Types of income and expenses

5 Australian source income

5 Foreign source income

6 Non assessable income

6 Other deductions

6 Capital gains and losses

8 General assumptions and limitations

10 Assumptions and limitations for eWRAP Accounts holding direct equities

12 Completing your Tax Return

12 Finding the correct Tax Return label

14 Applying the capital gains discount

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2 | Tax Report Guide

bout this GuideThis Guide is designed to help you understand the Tax Report you’ve received for your Asgard Account. The Guide outlines the tax assumptions and policies Asgard has used to prepare your Tax Report. It will help you to understand your Tax Report summary and the detailed supporting schedules which have been provided as part of our reporting service to assist in the preparation of your 2012 Tax Return.

This commentary is only intended as a general guide and doesn’t represent tax advice. Some of the assumptions and policies adopted may not apply to your individual circumstances and you may need to use different tax treatments.

If a tax policy or any assumptions we’ve applied for a particular item are not appropriate to your personal circumstances, you should recalculate that item and use the new amount instead of what is shown in your Tax Report. If any of the limitations noted in this guide apply to your Account you should determine the appropriate tax treatment for that item separately together with your tax adviser.

Different tax policies have been applied in preparing your Tax Report depending on your entity type. The different entity types used are:

• Individual

• Company

• SuperannuationFund(complying)

• Trust

Your entity type is shown on the summary page of your Tax Report. The Tax Return references shown on the Tax Report are based on this entity type. If the entity type is incorrect you’ll need to consider the impact on your Tax Report and make adjustments where appropriate. You should also advise us so the entity type can be corrected for future years.

This Guide also includes examples for resident individuals to help you correctly record the income and deductions shown in your Tax Report on your 2012 Tax Return. These examples are tailored for resident individualsandmaynotberelevantforCompanies,SuperannuationFunds,Trustsornon-residents.

We recommend you seek professional advice to complete the Tax Return applicable to your circumstances.

You should provide your tax adviser with this Guide and your Tax Report. If your tax adviser is also preparing financial statements, you may need to provide them with your latest Investor Report as well, which will contain transaction details. Please retain the Tax Report and this Guide for income tax purposes.

This Guide consists of four parts:

Part 1: About your Account

Part 2: Understanding your Tax Report• Structure of the Tax Report• Types of Income and Expenses

Part 3: Assumptions and limitations applied in preparing your Tax Report• General — applicable to all account types• eWRAP accounts holding direct equities

Part 4: Completing your Tax Return• Findingthecorrecttaxreturnlabel• Capitalgainsandlosses

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Tax Report Guide | 3

The legal structure of Asgard’s Accounts The table below shows the legal structure of the Asgard Accounts and how the income received from them is assessable.Foreachofthesestructures,theTaxReportassumestheinvestorisabsolutelyentitledtotheunderlyinginvestments in the Account.

Asgard account type Legal structure Income assessable to

Investment Funds Account (including Managed Profiles and Separately Managed Accounts – Funds Investment Account and Elements Investment Account)

Master Trust: All managed investments held through this Account are acquired in the name of Asgard as responsible entity. Income distribution notices are issued in the name of Asgard but are deemed to be income received directly by the investor in the name in which their Account is held.

This income is assessable to the investor and must be included in their Tax Return, even if they haven’t made any withdrawals from their Account.

Trustee Funds Account An Investor Directed Portfolio Service for managed investments which are held in the name of Asgard as custodian for the investor.

The income is assessable to the investor and must be included in their Tax Return even if they haven’t made any withdrawals from their Account.

eWRAP Accounts (including eWRAP – Investment Account and Infinity eWRAP – Investment Account)

An Investor Directed Portfolio Service for managed investments and custodial shares which are held in the name of Asgard as custodian. eCASH/CASH Connect (the Cash Account for eWRAP Account) and sponsored shares are held directly in the investor’s name.The investor continues to receive bank statements for the eCASH or CASH Connect Account and dividend statements for sponsored shares.

This income is assessable to the investor and must be included in their Tax Return, even if they haven’t made any withdrawals from their Account.

art 1: About your Account

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4 | Tax Report Guide

The amounts shown in your Tax Report relate solely to investments held through an Asgard Account. If you’ve any other investments, you must add them to the amount on your Tax Report and transfer the total to the relevant label on your Tax Return. If you’ve transferred investments into an Asgard Account during the year, the Tax Report will only include income earned after the transfer date.

If you have more than one Asgard Account, you’ll receive a separate Tax Report for each Account. An annual Tax Report is issued to all investors who had a taxable transaction on the Account during the tax year, including closed Accounts.

Structure of the Tax ReportYour Tax Report is split into the following sections:

Statement of Annual Taxation SummaryThe Statement of Annual Taxation Summary (Statement)containsallthefiguresyouneedtocomplete your 2012 Tax Return.

The labels at items on the tax return are the white letters inside coloured boxes on the Tax return. If you choose to use a tax agent to prepare your income tax return, please advise them to rely on the information in this statement rather than information that may be displayedinthetaxagent’spre-fillingservice.

The Statement has been prepared based on the Entity Typeshownatthetopofthestatement(i.e.Individual/Trust/Company/SuperannuationFund).

• All tax return labels on the statement are based on your Tax Return for that entity type.

• TheCGTdiscounthasbeencalculated/adjustedbased on the entity type.

Supporting SchedulesThe Supporting Schedules provide detailed information relating to your investment in the Account, including a full breakdown of the figures shown on the Statement and various schedules in support of the Statement.

Trust Distributions ReceivableDistributions paid by listed and unlisted trusts are included in your Tax Report on a present entitlement basis. This includes distributions that may have been paidafteryear-endtowhichyouwerepresentlyentitledat 30 June. The Trust Distributions receivable schedule is provided to assist you in reconciling your Tax Report to transaction reports such as your Investor Report which include information on a “cash basis”.

Unrealised Capital Gains ReportThis schedule is not part of the main tax report and is additional information provided to self managed superannuation funds only. This information is provided to assist self managed superannuation funds incalculatingestimatedunrealisedCGTwhichmaybe required in preparing financial statements. The schedule is based on information as at 30 June and may not be updated for subsequent cost base adjustments.

The figures shown on the Supporting Schedules have been included in the Statement and are for your reference only.

Type of income Source

Interest income • Money market investments• Cash Holding Account• Cash Management Account• eCash Account• Cash Connect Account

Dividend income • Direct shareholdings

Trust distribution income

• Managed investments• Direct holdings in listed unit trusts

Other income • Fee rebates from managed funds• Gains on the sale of traditional

securities

art 2: Understanding your Tax Report

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Types of Income and ExpensesIncome can be derived from a number of sources, depending on the type of Asgard Account. This section explains the amounts of Australian Source Income, ForeignSourceIncome,NonAssessableIncome,CapitalGains and Losses and Other Deductions shown on the Tax Report:

Australian source incomeInterestThis amount is Australian interest income received on your cash balance, together with any other interestincome(suchasthatreceivedfromafixedinterestinvestment)andanyinterestincomefromthefollowing accounts:

• AsgardorMacquarieCashManagementAccounts• eCASHorCASHConnectAccount(throughAsgard

eWRAPAccounts).

Interest income has been included as assessable income on the date of receipt.

Other IncomeThe “other income” disclosed in the report will include any fee rebate amounts received during the year and any gains on traditional securities.

Dividends from sharesIf the investment is through Asgard eWRAP Accounts, dividend income from shares is summarised on the Statement of Taxation Summary under the items ‘UnfrankedDividends’,‘FrankedDividends’and‘FrankingCredits’.Thisincomeisshownindetailonthe Dividend Income Schedule.

Dividends have been included in assessable income on the date of payment of the dividend. Dividend income which forms part of a trust distribution is included in the ‘Trust Distributions’ amount.

An“unfrankedCFI”amountrepresentsanunfrankeddividend received from an Australian company to the extentthedividendisdeclaredtobe“ConduitForeignIncome”(CFI).TheunfrankedCFIamountisincludedas part of unfranked dividends in the Tax Report.

Franking creditsA franking credit represents an allowance for tax already paid by a company paying a dividend. You may receive a franking credit on a dividend you receive from direct shares or as part of a distribution from a listed trust or managed investments. The amount of any franking credits is included in your assessable income for the year, but is also allowed as a credit against any tax payable on assessable income. The credit is known as a tax offset.

A tax offset for franking credits may not be claimable in certain cases. The investor may be affected if their interest in shares was acquired on or after 1 July 1997 and they didn’t hold that interest ‘at risk’ for more than 45days(or90daysforpreferenceshares)excludingtheday of purchase and sale.

Asgard has reviewed some of the investments in managedinvestmentsinyourAccount(seePart3:Assumptions and limitations applied in preparing your TaxReport).Forthemanagedinvestmentsreviewed,your Tax Report includes the following information:

• those investments held for 45 days or less• franking credits which are at risk of being denied

pursuant to this legislation.

Any franking credits attached to investments identified as being at risk are disclosed as a footnote to your Tax Report, but haven’t been deducted from the amounts shown on the Statement of Taxation Summary or supporting schedules.

The availability of franking credits detailed in your Tax Report depends on individual circumstances. We recommend you consult your tax adviser to determine whether these franking credit tax offsets are allowable.

These measures, which limit the availability of a franking credit tax offset, don’t apply to individuals whosetotalentitlementtofrankingcredits(includingthosefrankingcreditsfromtrustdistributions)isequalto or less than A$5,000.

Trust distributionsThis amount represents the Australian — sourced income component of trust distributions from managed investments and listed funds.

Distributions are shown in the Trust Distributions Schedule in the year the investor becomes entitled to the income. This may be different to the year in which the distributions are received.

The tax components of trust distributions have been calculated based on actual percentage components, as advised by the relevant fund manager or registry.

Foreign source incomeWe’ve reported all foreign source income and foreign incometaxoffsetsintheForeignIncomeSchedule.

We’veapportionedexpensesagainstforeignincome(seethe‘ExpenseApportionment’item)andtheseareshownon the Statement of Annual Taxation Summary.

Australian franking credits from a New Zealand companyTheTrans-TasmanimputationmeasureallowsNewZealand resident companies to choose to enter the Australian imputation system. If the fund you’ve investedinisanAustralianshareholderofaNewZealand franking company and received franked dividends with Australian franking credits attached directlyorindirectlyfromaNewZealandfrankingcompany, then you’ll need to show these amounts in your Tax Return.

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Net foreign loss quarantineChangestothenetforeignlossquarantineruleswere introduced with effect from 1 July 2008. As such, you may need to consider the ability to use any carried forward losses in accordance with the transitional rules.

Foreign income tax offsetsIf you’ve received foreign income tax offsets, you will need to consider your eligibility to claim these offsets. Refertothe‘GuidetoForeignIncomeTaxOffsetRules2011–12, available from the ATO website, for further guidance relating to foreign income and foreign income tax offsets.

Non-assessable incomeThedistribution(s)receivedviayouraccountmayincludetax-exemptincome,tax-freeincome,tax-deferredincomeand/orreturnofcapital.Theseamounts are generally not assessable for income tax purposes, but may affect the calculation of any capital gain or loss on disposal of the investment. Theadjustmentstothecostbaseand/orreducedcost base for these amounts have been made for the purposes of your Tax Report at the payment date of the distribution.

Expense apportionmentAsgard has added together all attributable expenses, paid via the account, which you may be entitled to claim as an income tax deduction in relation to trust distributions. The expenses have been apportioned across Australian source trust distributions, foreign source trust distributions, interest income and dividend income and are shown in the relevant sections of the Statement of Annual Taxation Summary.

You should consider the deductibility of these expenses based on your individual circumstances.

These expenses may include the following items:

• managementcostsandotherexpenses(forexample,trusteefeesandmonthlyadministrationfees)

• interest paid to St.George Bank for monies borrowed to invest via the account

• St.GeorgeBankloanexpenses(forexample,stamp duty).

Contributionfees/upfrontfeeswhichyou’vepaidarenotincluded as expenses in the annual tax report. These fees are treated as a cost of acquisition and included in the cost base of the investments you purchased.

Other deductionsPremiums for Income ProtectionYou may be able to claim a tax deduction for Income Protection insurance premiums shown on the Tax Report under this heading.

Interest and dividend deductionsWhere there are investments in either interest bearing ordirectinvestments(shares),we’veattributedsomeofthe expenses paid during the year to these deduction items. These expenses may include the following:

• managementandotherexpenses/losses,forexample, trustee fees

• interest paid to St.George Bank for monies borrowed to purchase shares via the account

• St.GeorgeBankloanexpenses(forexample,stamp duty)

• bank fees and government charges attaching to theAsgardCashManagement,MacquarieCashManagementAccountorAsgardeCASH/CASHConnectAccount.

The deductibility of bank fees and government charges attachedtoyourCashManagementAccountandAsgardeCASH/CASHConnectAccountwilldependonthe types of transactions for which the account is used. To the extent the Account is used for private purposes (withdrawalstocoverprivateexpenses),thesefeeswillneedtobeapportionedintodeductibleandnon-deductible components. We’ve reported the full amount of these fees in your Tax Report.

Gearingdeductions(forexample,interestorfees)forinvestments with Asgard are not reported in your 2012 Tax Report where gearing is provided by sources external to Asgard. ‘Gearing — Interest Deductions’ on the Tax Report shows the full amount of interest paid during the financial year. If you’re an individual or a small business entity, you can claim outright prepaid interestifitsatisfiesthe12-monthrulewherebyit’spaid for a period within 12 months and the period covered ends in the next financial year.

Ifyou’reamediumorlargebusiness,oranon-individual that isn’t carrying on a business, prepaid interest may be apportioned over the periods to which it relates. Expenditure less than A$1,000 is deductible immediately.

Borrowing costs are recorded at the time of undertaking a borrowing, but are shown as deductions on the Tax Report over the lesser of the term of the borrowingorafive-yearperiod.

Capital gains and losses The capital gains shown in your Tax Report are derived from two main sources:

• trust distributions from fund managers and listed unittrusts(refertothe‘IncomeReceived’column).

• thesaleofinvestments(refertothe‘Gains/Losseson Sales’column).

Trust Distributions Schedule The Trust Distributions Schedule contains detailed information on the capital gains from trust distributions.

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Tax Report Guide | 7

Ifyou’reanon-residentinvestor,youshouldseekprofessional advice for your own circumstances as this guide is tailored specifically for resident investors.

TheTrustDistributionsScheduleincludestheCGTcomponents as declared by each fund. In some cases, the capital gains distributed are not split equally between the assessable discounted gain and the exempt concessionalcomponent(thiswilldependoneachfundmanager’sdistributionpolicies).

TheCGTdiscountrateapplyingtodistributedcapitalgains has been adjusted based on the entity type shown on the Statement of Annual Taxation Summary. If the entitytypeisincorrect,yourCGTcalculationwillbeaffected. We recommend you seek tax advice if this is the case. The adjustment is shown in the ‘Adjustment or TaxCredit’columnontheStatement.

Forexample,ifthediscountedcapitalgainis$100(afterthe50%discount)thenthegrossedupgainis $200.

• Trust/Individual—afteradjustments,thetaxablediscountedgainis$100(50%discount).

• Company—afteradjustments,thetaxablediscountedgainis$200(nodiscount).

• Superannuation fund — after adjustments, the taxablediscountedgainis$133(33 %discount).

The ‘Additional Information’ section of your Tax Report separates capital gains from trust distributions into capital gains classed as ‘Taxable Australian Real Property’(TARP)and‘NotTaxableAustralianRealProperty’(NTARP).Thissplitisrelevantfornon-resident investors.

Capital Gains/Losses ScheduleTheCapitalGains/LossesSchedulecontainscalculations of capital gains and losses as a result of the sale of investments.

This schedule calculates the capital gain on each assetsaleusingboththeNonDiscountMethod(theIndexed Method applies if assets are held for more than 12 months and acquired before 21 September 1999 or, the Other Method applies if assets are held for less than12months)andDiscountMethod.Thelowestgainamount is transferred to the body of the Tax Report.

We’ve assumed all profits and losses from investment sales are assessable as capital gains or losses and not as ordinary income. If the investor is a ‘trader’ in securities or otherwise considered to hold investments on revenue account, or has been classified as such by the ATO, the investor should seek separate advice as to how the tax provisions apply.

Capitalgainsandlossesonsalesarereportedonthedatetheinvestmentissold(ordeemedtobesold).CapitalgainsonthesaleofinvestmentsareshownintheCapitalGains/LossesScheduleaftertherelevantCGTdiscounthasbeenapplied.Wherelossesaretobeoffset against discount capital gains, the discounted capitalgainwillneedtobe‘grossedup’tothepre-discount amount.

We have not calculated the “net capital gain” in your Tax Report as this may need to be adjusted if you have capital gains or losses from other sources or if you’ve carried forward capital losses. Please refer to the capital gains and losses worksheets in Part 4 of this Guide for information on how to calculated the net capital gain or loss.

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8 | Tax Report Guide

art 3:Assumptions and limitations applied in preparing your Tax Report

The preparation of the Tax Report is based upon a number of policies, assumptions and limitations. We recommend you:

• seek professional tax advice about the impact of these assumptions and limitations on the accuracy of the information to include in your income tax return

• checktheaccuracyofanyCorporateActionsprocessedonyourAccount(ifapplicable)againstany documentation that you received from the share registry.

General — applicable to all account typesFollowingisalistofthepolicies,assumptionsandlimitations we’ve made in preparing your Tax Report:

General preparation • Your Tax Report shows amounts in whole dollars for

Tax Return disclosure purposes. Totals have been calculated using the full amounts including cents and then rounded.

• Your Tax Report was prepared using information from our records, together with data provided by investment managers and share registry managers, plus other sources of relevant information including the ASX website.

• Your Tax Report was prepared on the basis of the investor being the type of entity disclosed in the header on the summary page of the Tax Report.

• Your Tax Report isn’t specifically designed for preparing financial statements as it’s been prepared on a tax basis. When preparing financial statements you may also need to refer to your Investor Report and transaction reporting which includes transactions on a cash basis as well as portfolio balances.

TFN Withholding TaxTFNWithholdingTaxmayhavebeendeductedfromthe Australian Interest income and Trust Distributions youreceivedifyouhavenotprovidedyourTFNtous.AnyTFNamountwithheldwillbedisclosedonyourTaxReport(exceptasnotedbelowinrelationtodirect equities).

Non ResidentsThe Tax Report was prepared on the assumption theinvestorhasbeenaresidentofAustralia(fortax purposes)forthewholeincometaxyear.

• Ifyou’reanon-resident,orifyouchangeyourcountry of residence, you must advise us so we can withhold the correct amount of tax on your investment income.

• Ifyou’veadvisedusyou’reanon-residentfortaxpurposes, we will have withheld tax on income paid to you. Any amounts withheld are shown inyourTaxReport(exceptforwithholdingtaxon income paid on sponsored share holdings as discussedbelow).

• Ifyou’reanon-residentfortaxpurposes,you’llneed to consider which items are relevant to your AustralianandForeignTaxReturnsbasedonyourindividual circumstances. We strongly recommend you obtain professional tax advice.

Taxation of Financial Arrangements (“TOFA”)WehavenotappliedtheTaxationofFinancialArrangements(TOFA)legislationtodeterminethetax treatment of gains and losses from financial arrangements in your portfolio for the current year. If you believe that these provisions apply to your investments, please consult your tax adviser to confirm the appropriate tax treatment applicable.

Net Investment LossesCertainexpensesincurredoninvestmentsmayresultin the investments making a loss, referred to as a net financial investment loss. A net financial investment loss is required to be shown at item IT5 on your Tax Return and is used in certain income tests to work out liabilityfortheMedicarelevysurchargeandHELPrepayments plus whether you’re entitled to receive a range of government support programs and tax offsets. Please consult your financial accountant or tax adviser to determine if you have a net financial investment loss. We haven’t calculated the net investment loss in your Tax Report.

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Passive investorWe’ve assumed you’ve acquired all assets as a passive investor and therefore applied the capital gains tax provisionstoyourinvestments(exceptforcertaindirectsecurities — refer to next section ‘eWRAP Accounts holdingdirectequities’).

Parcel Selection The order of sale of tax parcels for a particular asset will depend on the particular accounts invested through.

ForeWRAPAccounts,taxlotselectionformanagedinvestments is offered at the time of sale, while for shares you have an opportunity to select from four choices of allocation methods during the year.

Forotheraccounts(orwherenoselectionismadeineWRAPAccounts),astatedorderofsalewillapply.This stated order of sale is set out in the relevant offer documents. If you used a different method for selecting parcels when completing your income tax return in prior years, the gains and losses from the disposal of investments shown on your statement may need to be recalculated.

CGT rollover reliefWhereCGTrolloverreliefisavailableonanoptionalbasis at the election of the investor, we’re not able to reflect this election in your Tax Report as the choice of the election will depend on each investor’s particular circumstances. If optional rollover relief is elected, both current and future Tax Reports may not be accurate.

In-Specie transfers into the accountFormanagedinvestmentsorlistedsecuritiesthathave been transferred into your eWRAP Account, the purchase cost, date of acquisition, number of shares or units and adjusted cost base information is based on information supplied to Asgard at the time of transfer. The gain or loss calculated for any parcel you’ve sold will be incorrect if any of the transfer data provided is incorrect. Please review all disposals to ensure the details of the transfer are correct for each parcel sold.

In addition, if managed investments or listed securities were transferred into the Account during the year, your Tax Report will only include income received from the date the transfer was processed. You’ll also need to include any income received from these managed investments or listed securities prior to the transfer in your Tax Return.

In-Specie transfers out of the accountACGTeventgenerallydoesn’tariseonthetransferof assets out of the Account provided the beneficial ownershipoftheassetsdoesnotchange.Currently,ourview is that the account holder is the beneficial owner of the Account and that there’s no change of beneficial ownership where assets are transferred to another InvestorDirectedPortfolioService(“IDPS”)accountheld in the same name.

If you’ve transferred assets from an Asgard Investment FundsAccountoranAsgardTrusteeFundsAccount

to an eWRAP Account with Asgard the capital gains treatment will depend on the account you transferred to.InsomecasesaCGTeventwillbereportedwhereyou advised us the account was held in a different name. If the account holder is not the beneficial owner of the assets, we may not have identified the change of ownershipandyou’llneedtocalculateanycapitalgain/lossonthetransfer.Forexample,thismayoccuriftheaccount is held on trust for another party.

Forallothertransfersofassets,includingtransfersbetween eWRAP Accounts and from eWRAP Accounts to an external IDPS operator, we’ve assumed there was nochangeofownershiponthetransferandnoCGTevent will be reported in your annual Tax Report. If this isn’t the case, you’ll need to calculate and include inyourTaxReturn,thecapitalgain/lossonthetransfer.

You should review all transfers and ensure that a capitalgain/losshasbeencorrectlycalculatedforanytransfers where there’s a change of beneficial owner.

The 45-Day RuleCurrently,ourTaxReportsareonlyabletocheckonthe45-dayrulestatusoffrankingcreditsformanaged investments fund distributions for the Asgard InvestmentFundsAccountandAsgardTrusteeFundsAccount. In performing this check, we’ve assumed these managed investments are held ‘at risk’ for the entire period they’re held. We’re only able to test the impact ofthe45-dayruleinrelationtotheholdingsinyourAccount. If you have similar holdings in a different Account or in your own name, this may impact the availability of franking credits on your account. If you haveholdingsinanotheraccount(eitherwithAsgardorelsewhere)orholdinvestmentsinyourownname,you should seek professional advice in relation to the availability of franking credits.

Any franking credits attached to investments identified as being at risk are disclosed as a footnote to the Tax Report, but haven’t been deducted from the amounts shown on the Statement of Taxation Summary or Supporting Schedules. The availability of franking credits detailed on your Tax Report depends on individual circumstances. We recommend you consult your tax adviser to determine whether these franking credit tax offsets are allowable.

Capital LossesWe have reported current year capital losses only and haven’t taken into account any prior year losses that may have been carried forward.

Net Capital GainWehaven’tcalculatedyourNetCapitalGainasthiswill depend on your personal circumstances. We’ve reportedthetotaldiscountedgains,non-discountedgains, and capital losses in the Tax Report summary. Please refer to the examples on pages 13–16 for examples of how to calculate the net capital gain using thesefigurestogetherwithanyothercapitalgains/losses you may have.

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Managed Investment DistributionsWhere managed investments income distributions arereceivedonabasisotherthanannually(forexample,quarterlyormonthly),wedeterminethetax components of each distribution by allocating the total of each tax component for the full year proportionately across each distribution received.

GSTExpenses shown in your Tax Report are inclusive of any GST payable and net of any input tax credit or RITCthatwehaveclaimedwithintheAccount.Wherewehaven’tclaimedaninputtaxcreditorRITC,we’veincluded the total GST in the expense. If you’ve claimed anRITConthesefeesdirectlyinyourownBusinessActivity Statement, you’ll need to reduce the expense amountbytheRITCyou’vereceived.

eWRAP Accounts holding direct equitiesThis section includes additional policies, assumptions and limitations applying to eWRAP Account clients holding direct equities, which may include certain complex transactions or assets. Your financial adviser can provide you with a list of the particular investments to which these rules have been applied. We recommend you seek professional tax advice if you hold any of the assets discussed below.

Bonus SharesThe issue of bonus shares is generally not treated as a dividend or included in assessable income. Instead, as the bonus shares issued are taken to have been acquired at the time the original shares were acquired. ArevisedCGTcostbaseisdeterminedbyapportioningthe original cost base across both the original shares and the bonus shares.

SomecompaniesofferDividendElectionPlans(DEPs)under which an investor can choose between receiving bonus shares or receiving a dividend. Where a dividend is chosen, it may be taken as a cash dividend or by participatinginaDividendReinvestmentPlan(DRP).

As a general rule, under these circumstances, the ATO willtreatthebonusshareasadividend(andthereforetaxable).However,wherethecompanyofferingthechoice meets the following criteria, these bonus shares will not be treated as a dividend, but as a bonus share (asoutlinedabove):

• the company is a listed public company• the company does not credit its share capital account

in connection with the issue of the bonus shares• the dividend is not a minimally franked dividend

(frankedtolessthan10%).

ForthepurposesofpreparingyourTaxReport,we’veassumed a DEP would only be offered where these conditions are met and have therefore treated shares issued under a DEP as bonus shares. Where an investor chooses to take their dividend as a DRP, the amount of the dividend is included in assessable income and is treated as the cost base of the shares acquired.

Stapled SecuritiesWhere a security is a ‘stapled security’, an investor’s stapled holding may represent a combination of underlying entities which may include both shares in a company and units in a unit trust. Where such stapled securities include both dividend and trust distribution amounts, these amounts have been split and reported separately under each category according to the reporting rules for each category.

Where a group of securities are ‘stapled’ to become a singlelistedsecurity,theindividualholdings(eithersharesorunits)intheunderlyingentitiesarestillconsideredtobeseparateassetsforCGTpurposes(althoughtheycannotbetradedseparately).

In some cases, we’ve recorded a single acquisition date for the stapled securities. This may result in incorrect reporting of capital gains discounting where newly stapled securities are disposed of within twelve months of the stapling date and where an interest was previously held in only some of the underlying entities before the stapling.

Pooled Development FundsAPooledDevelopmentFund(PDF)isaspecialinvestment vehicle that invests in certain types of investments and receives concessional tax treatment forboththePDFandtheinvestor.PDFsareonlytaxed atarateof15%or25%,butcontinuetobeableto payfrankingcreditsatthe30%companytaxrate.In addition,investorsinPDFsreceivethefollowing:

• an exemption from income tax on unfranked PDF dividends

• achoicetotreatfrankedPDFdividendsaseitherexemptincome(withnofrankingcredits)orassessable but with the investor being entitled to the franking credits

• an exemption from deriving a capital gain or loss on saleofthePDFshares(ifit’saPDFatthetimeof sale).

ForthepurposesofpreparingyourTaxReport,we’veassumedallPDFdividendsaretobetreatedasexemptfrom tax. If investors wish to include franked dividends as assessable income and claim franking credits, they should refer to the dividend statement provided by the PDFfordetailsofthefrankeddividendamountandattached franking credits.

Listed Investment Companies Investors who hold investments in a Listed Investment Company(LIC)areentitledtospecialtaxationtreatmentwheretheLICdistributesadividend that is attributable to a capital gain, known asthe‘attributablepart’.WhereaLICpayssuchadividend, eligible investors are able to benefit from theCGTdiscountonassetsrealisedbytheLIConorafter 1 July 2001, provided the asset has been held for 12 months. To obtain this benefit, individual Australian resident investors are entitled to claim a deduction equalto50%oftheattributablepartofthedividendat the time it’s paid.

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Tax Report Guide | 11

In preparing your Tax Report, we have included a deduction for the attributable part of any dividends receivedfromLICs.Thedeductionisbasedon50%forindividuals and trusts and 33 %forsuperannuationfunds.DetailsoftheLICdeductionincludedcanbefound in the supporting schedules.

Traditional Securities The gains or losses arising on disposal, conversion or redemption of some types of securities are treated as assessable income or allowable deductions under tax law. These securities are known as ‘traditional securities’ and generally include investments such as stocks, bonds, debentures and various notes, including convertiblenotes(referbelow).

Any gains arising on traditional securities in your Account are included in the Tax Report as ‘Other Income’, while losses on traditional securities are shown as ‘Loss on sale of traditional securities’. Income on these types of securities is shown in your Tax Report as part of the interest component in the ‘Trust Distributions’ item or in the ‘Dividends’ item, based on the information provided by the registry.

Convertible Notes Convertiblenotesareonetypeofsecuritythatcanqualifyasatraditionalsecurity.However,forconvertible securities issued after 14 May 2002, the tax treatment differs from other traditional securities. Forthesesecurities,noassessablegainordeductibleloss will arise to the investor on conversion into ordinary shares. Instead, the gain or loss is deferred anddeterminedundertheCGTprovisionsasagainor loss on the ultimate disposal of the ordinary shares acquired by the conversion.

The cost of the convertible note, together with conversioncosts(ifany)willbetreatedasthecostbase for the shares acquired on conversion.

Any capital gain or loss resulting when the ordinary shares are eventually disposed of will be included in the CapitalGains/LossesScheduleinyourTaxReport.

These rules only apply if the note is converted into an ordinary share of the issuer or a connected entity or otherwise disposed of to the issuer or a connected entity. If this isn’t the case, the gain or loss is still treated under the traditional security arrangements.

Warrants Due to the nature of warrants and the lack of readily available information required to perform tax calculations for warrants, we’re not able to correctly report all relevant tax information relating to warrants.

In preparing the Tax Report in relation to warrant holdings, we’ve included all dividend information relating to the underlying shares that make up the warrant. Your Tax Report does not include:

• any capital gains on either the warrant or the underlying shares

• any tax deductible components of the warrants such as interest and borrowing costs.

In order to complete your Tax Return in relation to warrant holdings, refer to the tax reporting information supplied by the warrant issuer.

Trust Distributions — year end other than 30 June Where a trust has a year end other than 30 June, investors are required to include the relevant components of the distribution in their assessable income in the financial year during which the trust’s yearofincomeends.Forexample,ifatrusthasayearend of 31 December 2011, all distributions in respect of the year from 1 January 2011 to 31 December 2011 must be included in your Tax Return for the year ended30 June 2012.Interimdistributionsforthehalf-year ending 30 June 2012 should be included in your 30 June 2013 Tax Return. Amounts are included in the Trust Distributions Schedule of the Tax Report on the basis of these rules.

Rights Issues ForthepurposeofpreparingthisGuideandyourTax Report, we’ve assumed rights issues are on capital account.

Franking CreditsWe haven’t applied the 45 day or 90 day holding period tests to any investments held through eWRAP Accounts.

You should consider your eligibility for any franking credits.Pleasereferto“FrankingCredits”inPart2for further information.

TFN and non-resident withholding on direct equities Aswe’renotadvisedontheamountofTFNwithholdingtaxornon-residentwithholdingtaxthatshareregistries have deducted from dividend payments during the year, your Tax Report doesn’t include any amounts of withholding tax deducted from dividends. Any withholding amounts deducted from dividend payments will have been reported by the share registry on the dividend statement provided to the investor.

Foreign Withholding Tax Where a company pays a dividend and that dividend is subject to withholding tax in a country outside Australia, Australian tax law requires the full amount of the dividend to be included in assessable income by the investor receiving the dividend. A foreign income taxoffsetmaybeclaimed(incertaincircumstances)for the foreign tax withheld.

Fortrustdistributions,thenetamountafterwithholdingtaxisshownas‘CashDistributions’and thetaxwithheldisshownas‘ForeignIncomeTax Offsets’ in the Trust Distributions Schedule.

Fordividendspaidbyforeigncompanies,therateofthe withholding tax depends on the investor’s personal circumstances. As we’re not aware of the rate of withholding tax applying in each case, your Tax Report shows the full amount of the dividend before withholding tax, but doesn’t show an amount for withholding tax paid. Investors wishing to claim a foreign income tax offset for this withholding tax should identify the relevant amount from their dividend statement.

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12 | Tax Report Guide

art 4: CompletingyourTax ReturnFinding the correct tax return labelThis section is designed to help you complete your Tax Return using your Tax Report.

The following is a sample Tax Report showing you how to use your report to find the correct tax return question and label for each item of income or expense.

An example of completing a Tax Return using the Tax ReportSample Tax Report Excerpt

Excerpt only — Statement of Annual Taxation Summary for year ended 30 June 2012

Income ComponentsIncome

Received

Gains/Losses on

SalesAdjustment

or Tax Credits TaxableTax Return

Label

Australian Source Income

Interest (Question 10) 121 121 L

Excerpt only — Individual Tax Return 2012

Other incomeCategory 1

Category 2

Type of income

Tax withheld – lump sum payments in arrears

Taxable professional income

Gross interest ,.

,.00

Dividends ,.00

,.00

,.007401UFranking

credit

8871TFranked amount

5541SUnfrankedamount11

121LGross interest3182MTax file number amounts

withheld from gross interest10

INCOME

Partnerships and trusts

Non-primary production

,.00

,.00

, ,.00

Share of credits from income

,.

,. 0525RShare of credit for tax file number amounts withheld

from interest, dividends, and unit trust distributions

00084QShare of franking creditfrom franked dividends

70441Net non-primary production distribution

0251YOther deductions relating todistributions shown at O and U

72951UDistribution from trusts, lessnet capital gains and foreign income

13

Interest deductions,

.0008ID7

Dividend deductionsD8

,.00

,.00Z

Sale of traditional securities

Other income

E

DEDUCTIONS

Foreign source income and foreign assets or property

, ,.00

, ,.00

, ,.00

,. 0021OForeign income tax offset

9F

28M

, ,.00

, ,.00V

Y

Other net for

Australian franking credits from a New Zealand company

eign source income

59EAssessable foreign source income

20

24

Other deductions – not claimable at items toor elsewhere on your tax return

, ,.00592JOther

deductionsDebt deductions relating to foreign income, income protection insurance and loss on traditional securities.

Descriptionof claim

D15D1D16

05

01

,.0001H

Sample Tax Return Excerpt

The question numbers and labels in the Tax Report will be different depending on your entity type. All examples in this Guide are based on Individuals and relate to the Individual Tax Return 2012 or the Tax Return for Individuals (supplementary section) 2012 which are collectively referred to as the Tax Return.

This Guide is not intended to be a substitute for the ATO instructions and should be read in conjunction with them.

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Capital gains and lossesThecapitalgainssectionofyourTaxReportshowstheindexed,other,discounted(afterdiscount)andCGTconcessionamounts as well as the capital losses.

The following pages contain three examples, with corresponding worksheets, to help you ascertain how to apply the CGT discountanddeterminethenetcapitalgainornetcapitalloss.

1. Capitalgainsandnocapitallosses.

2. Capitallossesexceedingyourcapitalgains.

3. Capitalgainsexceedingyourcapitallosses

Please note, these examples don’t consider the impacts of capital gains or losses you may have from outside this Account, or capital losses carried forward from prior years. If these situations apply to you, you’ll need to adjust your Tax Return accordingly.

If your Account is in the name of a trust, company or superannuation fund, the following examples are not tailored for youandtheremaybedifferencesinthewayyouneedtoapplytheCGTdiscount.

An example of the Capital Gains section of the Tax Report

Capital gains distributed by trusts

Capital gains/losses on the sale of your assets

Total of the first 3 columns. Total is before

offsetting losses.

Use these figures to determine the net gain

using worksheet 1,2 or 3.

This is the “total gain” required for disclosure

in the tax return at 18-H

Adjustments increase or reduce the taxable amount:Includes the adjustment to the Discount Gains where

your discount rate is less than 50% based on your entity type

Tax report excerpt item Income Received

Gains/Losses on Sales

Adjustment or Tax Credits

Taxable

Capital Gains (Question 18)Indexed Method 0 210 0 210Other Method 100 43 0 143Discount Method (After Discount) 60 0 0 60Capital Gains Concession 60 0 (60) 0Capital Losses 700 700Total Capital Gains 473

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14 | Tax Report Guide

The table below provides an excerpt from the Tax Report for each of the examples. Note that the ‘Taxable’ column in the Tax Report is the total of capital gains from distributions and sales.

Capital gains

Example 1No capital losses

($)

Example 2Losses exceeding

gains ($)

Example 3Gains exceeding

losses ($)

Indexed Method 210 210 210Other Method 143 143 143Discount Method (after discount) 60 60 60

Capital losses 0 700 200 for 3a (or 400 for 3b)

Total capital gains 473 473 473The figures shown in the ‘Total capital gains’ row are not net figures. These figures represent the total capital gain before losses are offset and before discounting is applied, which is required to be disclosed in the Tax Return for individuals. This figure is calculated as: Indexed Method + Other Method + (2x Discount Method (after discount)).

Worksheet 1 — no capital lossesThe net capital gain is calculated as shown in the table below.

Example from above ($)

Worksheet for you to use

Indexed Method 210+ + +

Other Method 143+ + +

Discount Method (after discount) 60= = =

Net capital gain (Question 18, Label A)

413

Net capital gains: examples and worksheets for individualsSample Tax Report Excerpt

18 Capital gains Did you have a capital gains tax event during the year? G NO YES

Did this CGT event relate to a forestry managed investment scheme interest that

you held other than as an initial participant?Q NO YES

Total current year capital gains H Net capital losses carried

forward to later income years V

Net capital gain A

You must print X in the YES box at G if you received a distribution capital gain from a trust.

4

4

1

7

3

3

Sample Tax Report Excerpt

Sample Tax Return Excerpt

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Tax Report Guide | 15

Worksheet 2 — capital losses exceed capital gainsThe net capital gain is calculated as shown in the table below.

Example from above ($)

Worksheet for you to use

Indexed Method 210+ + +

Other Method 143+ + +

Discount Method (after discount) 60+ + +

Gross up the discounted gain* 60- - -

Capital losses (700)= = =

Net capital loss (Question 18, Label V)

227

*The discounted gains have already been reduced by 50%. Losses must be offset before the discount is applied. As such, the discounted gain needs to be ‘grossed up’.

18 Capital gains Did you have a capital gains tax event during the year? G NO YES

Did this CGT event relate to a forestry managed investment scheme interest that

you held other than as an initial participant?Q NO YES

Total current year capital gains H Net capital losses carried

forward to later income years V

Net capital gain A

You must print X in the YES box at G if you received a distribution capital gain from a trust.

4

2

7

2

0

3

7

Sample Tax Report Excerpt

Sample Tax Return Excerpt

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16 | Tax Report Guide

Worksheet 3 — capital gains exceed capital lossesThe net capital gain is calculated as shown in the table below.

Example 3a(Losses are less than

non-discount gains) ($)

Example 3b(Losses are more than non-discount gains) ($)

Worksheet for you to use

Step 1: Losses applied against non-discount gains

Indexed Method 210 210+ + + +

Other Method 143 143- - - -

Capital losses (200) (400)= = = =

Step 1 total: Sub-total after offsetting losses against non-discount gains

153 (47)Step 2: Remaining losses applied against discount gains

Discount Method (after discount)

60 60

+ + + +Gross up the discounted gain* 60 60

- - - -Losses after Step 1 (if any) N/A (47)

= = = =Sub-total after offsetting losses against discount gains

120 73

*50% *50% *50% *50%Step 2 total: Discounted capital gains after losses and discounting applied

60 36Step 3: Add remaining non-discount and discount capital gains from Step 1 and Step 2

Step 1 total (if a positive number)

153 N/A

Step 2 total 60 36Net capital gain (Question 18, Label A)

213 36

*The discounted gains have already been reduced by 50%. Losses must be offset before the discount is applied. As such, the discounted gain needs to be ‘grossed up’.

18 Capital gains Did you have a capital gains tax event during the year? G NO YES

Did this CGT event relate to a forestry managed investment scheme interest that

you held other than as an initial participant?Q NO YES

Total current year capital gains H Net capital losses carried

forward to later income years V

Net capital gain A

You must print X in the YES box at G if you received a distribution capital gain from a trust.

4 7

312

3

Sample Tax Report Excerpt

Sample Tax Return Excerpt

18 Capital gains Did you have a capital gains tax event during the year? G NO YES

Did this CGT event relate to a forestry managed investment scheme interest that

you held other than as an initial participant?Q NO YES

Total current year capital gains H Net capital losses carried

forward to later income years V

Net capital gain A

You must print X in the YES box at G if you received a distribution capital gain from a trust.

4 7

63

3

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Tax Report Guide | 17

Completing a CGT ScheduleYoumayneedtocompleteaCGTScheduleifyourcapitalgainsorcapitallossesexceedA$10,000.However,individualswholodgepaperTaxReturnsarenotrequiredtocompleteaCGTSchedule.

IfyouneedtocompleteaCGTSchedule,pleasetakenoteofthefollowinginformation:

• capitalgainsfromrealisedgainsareincludedunderthe‘Non-activeassets’labelsassharesandunits• capitalgainsfromthevariousfundmanagerdistributionsareincludedintheCGTScheduleunderthe‘Non-active

assets’labelsas‘OtherCGTassets’.

Refertothe‘Personalinvestorsguidetocapitalgainstax2011–12’(issuedbytheATO)forthestepstocompletetheCGTlabelsintheTaxReturn.

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AS9904-0612lc