What if the Market Recovers Before Next Balance Date?

03/12/2009

In this case, the ATO may overlook the failure to implement the divestment strategy.

To do so, the ATO will need to be satisfied that:

• the reason for the in-house asset ratio becoming excessive is due to the decline in the market value of non in-house assets; and
• the reason for the in-house asset ratio reducing to 5% or less after balance date is solely because of the recovery of the market value of non in-house assets.

Rectifying the in-house assets ratio by making further contributions after balance date will not be effective.  The divestment obligation will still apply and the ATO is unlikely to consider such action as being within the administrative concession.