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Taxation Determination

TD 92/193

Income tax: is the interest component of Household Support repayments, under the States and Northern Territory Grants (Rural Adjustment) Act 1988, an allowable deduction under subsection 51(1) of the Income Tax Assessment Act 1936(ITAA)?

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FOI status:

may be releasedFOI number: I 1213709

This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953, is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue.

1. Household Support Assistance (HSA) is paid to farmers adjusting out of farming to provide for their immediate essential living requirements.

2. Where the farmer is required to repay the assistance received, any interest component of the repayments must draw its character from the use of the payments. Payments used for living requirements are characterised as of a private or domestic nature. Therefore the interest component of the repayments of HSA where the money was used for living requirements is not an allowable deduction under subsection 51(1) of the ITAA.

Example:

Farmer X receives HSA payments which are used for essential living requirements. After 18 months he/she decides to stay in the industry and is required to repay the loan with interest. The interest is not an allowable income tax deduction because the HSA payments are used for private and or domestic purposes.

Commissioner of Taxation
26/11/92

Previously issued as Draft TD 92/D125

References

ATO references:
NO NEW TD4

ISSN 1038 - 8982

Related Rulings/Determinations:

TD 92/170

Subject References:
deductions for interest;
allowable deductions;
grants;
subsidies

Legislative References:
ITAA 51(1);
States and Northern Territory Grants (Rural Adjustment) Act 1988

TD 92/193 history
  Date: Version: Change:
You are here 26 November 1992 Original ruling  
  12 April 2017 Withdrawn  

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