Document ID: chunk:federal_register_of_legislation:C2004A00588:clause:1_71e:p1
Version: federal_register_of_legislation:C2004A00588
Segment Type: clause
Provision Reference: sch 1 cl 71E (pt 1/2)
Character Range: 26808–29453

71E  Exception—certain geared investments

 (1) If:
 (a) at any time (the post‑test time) after the test time, an asset of a superannuation fund that has fewer than 5 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 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 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)