Income Tax Assessment Act 1997
The provisions mentioned in subsection (2) do not apply in relation to the following transactions:
(a) the immediate reinvestment of a *farm management deposit as a farm management deposit with the same *FMD provider;
(b) the extension of the term of a farm management deposit (even if other terms such as those relating to interest payable are also varied);
(c) the transfer of a farm management deposit in accordance with a requirement of the relevant agreement as set out in item 13 of the table in section 393-35 (which allows for transfers of deposits at the request of the depositor).
This means that these transactions:
The provisions are:
(a) section 393-5 (about deductions for making a farm management deposit); and
(b) subsection 393-10(1) (about assessability of the repayment of a farm management deposit); and
(c) subsections 393-40(1) and (2) (about repayment of a farm management deposit within the first 12 months); and
(ca) subsection 393-40(3) (about repayment of a farm management deposit in the event of severe drought); and
(d) subsections 393-40(3A) and (4) (about repayment of a farm management deposit in the event of an applicable natural disaster).
For the purposes of working out the *unrecouped FMD deduction for a deposit that is subject to a transaction mentioned in subsection (1), the transaction does not cause the deposit to be a different deposit.
This ensures that the unrecouped FMD deduction (which affects how much income tax is assessed in the event of a repayment) equals the deduction for the original deposit, less any amount included in your assessable income because of a previous repayment of the deposit.