Income Tax Act 2007 section 809FZC

Average holding period

Section 809FZC explains how to calculate the average holding period of an investment scheme's relevant investments for the purpose of determining how carried interest is taxed.

• The average holding period is a weighted average, calculated by multiplying each relevant investment's value by the time it was held, summing those amounts, and dividing by the total value of all relevant investments.
• Only investments made for the purposes of the scheme and by reference to which the carried interest is calculated count as "relevant investments".
• Intermediate holdings and intermediate holding structures are disregarded when identifying relevant investments and determining the average holding period.
• Deferred carried interest is treated as arising at the time it would have arisen had it not been deferred, so the average holding period is measured to that earlier point.