ATO Interpretative Decision
ATO ID 2002/825
Income Tax
Deductions and Expenses: Farm Management Deposits and Superannuation ContributionsFOI status: may be released
This version is no longer current. Please follow this link to view the current version. |
-
This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Does a deduction for a superannuation contribution reduce the taxpayer's 'taxable non-primary production income' calculated under subsection 393-65 (1) Schedule 2G of the Income Tax Assessment Act 1936 ('ITAA 1936')?
Decision
Yes, the deduction for a superannuation contribution reduces the taxpayer's 'taxable non-primary production income' calculated under subsection 393-65 (1) Schedule 2G of the ITAA 1936.
Facts
The taxpayer is carrying on a business of primary production but is also deriving more than $50 000 non-primary production income. The taxpayer is making contributions to a superannuation fund.
The taxpayer wishes to make a farm management deposit.
Reasons for Decision
Section 393-10 of Schedule 2G of the ITAA 1936 allows a deduction for a farm management deposit if certain conditions are satisfied. One of the conditions, at paragraph 393-10(1)(b) of the ITAA 1936, provides that a taxpayer's 'taxable non-primary production income' cannot exceed $50 000.
Where the 'assessable non-primary production income' exceeds the 'non-primary production deductions', the 'taxable non-primary production income' equals the difference (subsection 393-65(1) of schedule 2G or the ITAA 1936).
'Non primary production deductions' are defined in subsection 393-65(3) of schedule 2G of the ITAA 1936. The 'non-primary production deductions' are the difference between any allowable deductions and any 'primary production deductions'.
'Primary production deductions' are defined in subsection 363-60(5) of schedule 2G of the ITAA 1936 and include deductions that relate exclusively to the 'assessable primary production income', and deductions that, in the opinion of the Commissioner, appropriately relate to the 'assessable primary production income'.
The Commissioner considers that 'primary production deductions' do not include deductions for superannuation contributions because they do not appropriately relate to the 'assessable primary production income'.
Consequently, the deduction for the superannuation contributions will increase the 'non-primary production deductions' and therefore reduce the 'taxable non-primary production income' calculated under subsection 393-65 (1) Schedule 2G of the ITAA 1936.
Date of decision: 23 July 2002Year of income: Year ending 30 June 2003 Year ending 30 June 2004 Year ending 30 June 2005
Legislative References:
Income Tax Assessment Act 1936
Schedule 2G, section 393-10
Schedule 2G, section 393-65
Schedule 2G, section 393-60
Keywords
Farm management bonds
Primary production income
Primary production expenses
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 23 July 2002 | Original statement |
| 1 July 2014 | Updated statement | |
| 10 June 2016 | Archived |