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What are stapled securities?

A stapled security is an investment product created when two or more securities are legally bound together and cannot be bought or sold separately. In Australia, they typically consist of a unit in a managed investment trust (MIT) stapled to a share in a related company.

Stapled securities are most common in the property sector, where they are used by Real Estate Investment Trusts (REITs) and infrastructure trusts. A-REITs pool investor capital to provide exposure to commercial properties — offices, shopping centres, industrial warehouses, and hotels — that would otherwise be inaccessible to individual investors. They are listed on the ASX and can be bought and sold like ordinary shares.

Common examples include:

• Stockland (SGP): Stockland Corporation Limited and Stockland Trust
• Charter Hall Group (CHC): Charter Hall Limited and Charter Hall Property Trust
• Centuria Capital Group (CNI): Centuria Capital Limited and Centuria Capital Fund
• Centuria Office REIT (COF): Centuria Office REIT and Centuria Office REIT
• Charter Hall Retail REIT (CQR): Charter Hall Retail REIT and Charter Hall Retail REIT
• Region Group (RGN): Region Management Trust and Region Retail Trust
• Vicinity Centres (VCX): Vicinity Limited and Vicinity Centres Trust
• BWP Trust (BWP): BWP Management Limited and BWP Trust
• Charter Hall Long Wale REIT (CLW): Charter Hall Long Wale REIT and Charter Hall Long Wale REIT
• Goodman Group (GMG): Goodman Limited and Goodman Industrial Trust
• Cromwell Property Group (CMW): Cromwell Corporation Limited and Cromwell Property Trust

Tax complexity

Although investors hold stapled securities as a single unit, each component carries distinct tax implications. The ATO requires that company dividends and trust distributions be reported separately on your tax return, which makes tax compliance more involved than for ordinary shares.

Key considerations include:

• Separate cost bases — each component (trust unit and company share) has its own cost base for CGT purposes
• Mixed distribution types — payouts typically include both trust income and company dividends, which are taxed differently
• Annual Tax Statement — the trust component will issue an Annual Tax Statement after 30 June each year, finalising the tax components for that financial year

How Sharesight handles stapled securities

Sharesight automatically classifies all distributions from stapled securities as trust income. This ensures they are correctly captured in your Taxable Income Report and flow through to your tax calculations.

If your distribution contains both trust and non-trust components (e.g. a company dividend portion), you can edit individual distributions in Sharesight to split them accordingly. This allows you to correctly categorise income, calculate capital gains separately for each component, and adjust entries when your year-end Annual Tax Statement reveals the finalised breakdown.

Note: Sharesight does not automatically update AMIT tax components for stapled securities. You will need to manually enter these from your Annual Tax Statement each year. See Australian AMIT tax components for instructions.