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Derivation & Attribution Period

Derivation period to be established first

When deciding what periods (of time) to attribute the assets and income of a structure to an individual(s), it is necessary to first establish the derivation period and then the attribution period.

Derivation period



A derivation period refers to a tax year and can be of any length up to and including a full tax year. The derivation period can include a period commencing before 1 January 2002. It is the period on which the amount of assessable income to be attributed to an attributable stakeholder is based and used in the pension assessment. In most circumstances, a derivation period will be the last financial year for which records are available. It should be noted that a derivation period is only applicable to income to be attributed and not assets.

Example of derivation period

On 1 January 2002, most assessments will be based on the derivation period 1 July 1999 to 30 June 2000, as that will be the most recent period for which tax records are available. When a reassessment of a pensioner's circumstances is sought, the derivation period may be the preceding 3 months, if that gives a more accurate reflection of the attributable stakeholder's income than the previous financial year.    

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Attribution period



An attribution period is the period for which income is to be attributed to an attributable stakeholder and included in their assessment. An attribution period must relate to a derivation period, which can, but does not have to, overlap. An attribution period can be shorter or longer than the derivation period to which it relates. Different attribution periods may be of different duration but in any case an attribution period must end when the specified period expires or when the person ceases to be an attributable stakeholder, whichever is the earlier.

Length of attribution period

Normally an attribution period would be for a full tax year, however if a pensioner requested a reassessment of his/her circumstances the attribution period could be determined by the delegate to be a period less than 12 months.

A derivation period has the meaning given by section 52ZZP of the VEA.



A derivation period has the meaning given by section 52ZZP of the VEA.



A tax year means:

  • a year of income (under the Income Tax Assessment Act 1936)



  • an income year (under the Income Tax Assessment Act 1997)

According to section 52ZZJ of the VEA, a person is an attributable stakeholder if a company or trust is a controlled private company or trust in relation to the individual unless the Commission determines otherwise.



Financial year, in relation to a company, means:

  • a period of 12 months beginning on 1 July, or
  • if some other period is the company's tax year that other period.



A derivation period has the meaning given by section 52ZZP of the VEA.