Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) If:
(a) at any time (the post - test time ) after the test time, an asset of a superannuation fund that has no more than 6 members consists of an investment (the post - test time investment ) in a unit trust or a company (the first entity ) made during the period:
(i) beginning at the test time; and
(ii) ending at the end of 30 June 2009; and
(b) immediately before the test time, another asset (other than an in - house asset) of the superannuation fund consisted of an investment (the prior investment ) in the first entity; and
(c) immediately before the test time, an amount (the principal ) consisting of the principal of a loan was owed by the first entity to any entity other than the superannuation fund; and
(d) apart from this Subdivision, the post - test time investment would be an in - house asset of the fund at the post - test time; and
(e) the trustee, or the trustees, of the fund makes a written election, within:
(i) the period of 12 months beginning on the day on which this section commenced; or
(ii) such later period as is prescribed by the regulations;
that section 71E is to apply to all post - test time investments of the fund in that entity;
Note: Under subsection 103(2A), the trustee, or the trustees, of the fund must keep the election, or a copy of it, for 10 years after it is made.
then subsection (2) or (3), as the case requires, applies, and is taken always to have applied, to the post - test time investment.
Sum of purchase prices of post - test time investments does not exceed the principal--investment not an in - house asset
(2) The post - test time investment is not an in - house asset of the fund at the post - test time if the sum of the following amounts does not exceed the amount of the principal:
(a) the purchase price of the post - test time investment;
(b) the purchase price of any previous post - test time investment in the first entity by the fund.
Sum of purchase prices of post - test time investments exceeds the principal--formula to be applied
(3) If the sum of the following:
(a) the purchase price of the post - test time investment;
(b) the purchase price of any previous post - test time investment in the first entity by the fund;
exceeds the amount of the principal, then:
(c) the post - test time investment is an in - house asset of the fund at the post - test time; and
(d) if the post - test time investment is the first post - test time investment in respect of which the sum of the amounts referred to in paragraphs (a) and (b) exceeds the amount of the principal--subsection (4) applies to the investment.
Reduced value for the purposes of working out value of in - house assets
(4) For the purposes of working out the formula component Number of whole dollars in value of in - house assets of the fund under section 75 at the post - test time, the value of the post - test time investment at the post - test time is taken to be the number of whole dollars in the amount worked out as follows:
where:
"excess amount" means the amount of the excess under subsection (3).
"market value of post-test time investment" means the market value of the post - test time investment as at the post - test time.
"purchase price of post-test time investment" means the purchase price of the post - test time investment.
Effect of election
(5) If the trustee, or the trustees, of a fund make an election under paragraph (1)(e) in respect of the post - test time investments of the fund in an entity, then:
(a) sections 71A and 71D do not apply, and are taken never to have applied, to any post - test time investment by the fund in that entity; and
(b) this section applies, and is taken always to have applied, to any post - test time investment of the fund in that entity.
Note: This means that if a fund makes an election, this section would apply to all investments in the entity after the test time and before 1 July 2009, and sections 71A and 71D would not apply to such investments.
Application of section to loans
(6) A reference in this section to an investment in a trust or company is taken to include a reference to a loan to a trust or company. For this purpose, the purchase price of the loan is taken to be the principal of the loan at the time at which the loan was made.