INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS  

Division 393 - Farm management deposits  

Subdivision 393-A - Tax consequences of farm management deposits  

SECTION 393-17   Tax consequences of liabilities reducing because of farm management deposits  

393-17(1)  
To avoid doubt, if amounts of interest payable by the *owner of a *farm management deposit, or by a partnership of which the owner is a partner, to the *FMD provider in respect of loans or other debts of the owner or partnership fall short of what they otherwise would be because the owner holds the farm management deposit, then:

(a) any income of the owner or partnership comprising the shortfall is neither assessable income nor *exempt income of the owner or partnership; and

(b) any amount that any person:

(i) is not liable to pay because of the shortfall; and

(ii) could have, apart from this section, deducted under this Act;

is not deductible.

393-17(2)  
However, this section applies only to the extent that the loans or other debts relate to a *primary production business that the *owner or partnership carries on.