Income Tax Act 2007 section 781

Tracing value

Section 781 sets out the rules for tracing the value of property or rights back through chains of companies, partnerships and trusts, to determine how much of one asset's value is derived from another.

• This section applies whenever it is necessary to determine how much of the value of any property or right comes from any other property or right, within the context of the transactions in land provisions
• Value can be traced through any number of companies, partnerships and trusts, with no limit on the length of the chain
• At each stage in the chain, the property held by a company, partnership or trust must be attributed to its shareholders, partners or beneficiaries as appropriate
• The method of attribution at each stage must reflect what is appropriate in the particular circumstances of the case