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Edited version of your private ruling
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Ruling
Subject: Deductibility of farm management deposit
Question
Can you claim a deduction for a farm management deposit in the relevant year of income where the deposit was made in the subsequent year of income?
Answer
No.
This ruling applies for the following period
Year ended 30 June 2012
Relevant facts
Your income increased in the relevant year of income as you became entitled to all of the profits of the farming activity.
You were unable to attend your trading bank to request for a farm management deposit to allow for a temporary deduction against the farming income.
You made the deposit in the subsequent year of income.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 393-5
Reasons for decision
The entitlement to a deduction for monies deposited in a farm management account is set out in section 393-5 of the Income Tax Assessment Act 1997. You can claim a deduction for a deposit in an income year that the deposit is made, providing you meet a number of other eligibility criteria.
In your case the deposit has not been made in the relevant year of income, therefore a deduction cannot be claimed in that year.
There is no discretion in relation to farm management deposits that the Commissioner can exercise to allow a deduction in a year before the deposit has been made. Providing all other eligibility criteria are met you will be able to claim a deduction for the deposit in the subsequent year of income.
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