Income Tax Act 2007 section 809FZE

Part disposals

Section 809FZE sets out how a partial disposal of an investment is treated for tax purposes, splitting the original investment into two notional separate investments and apportioning the original value between them.

• When part of an investment is disposed of, the part sold and the part retained are treated as two separate investments, both deemed to have been made at the same time as the original investment.
• The value assigned to each of the two separate investments is based on a proportionate share of the value originally invested in the whole investment.
• The proportion is determined by comparing the value of the relevant part to the value of the whole investment at the time of the disposal.
• A disposal of part of an asset includes disposing of an interest in, or a right over, the asset — so the rules apply broadly, not only to straightforward partial sales.