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 393-15   Transactions to which the deduction, assessment and 12 month rules have modified application  

393-15(1)  
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).

Note:

This means that these transactions:

  • (a) will not result in assessable income for the owner; and
  • (b) will not give rise to a deduction; and
  • (c) will not, if the transaction occurs within 12 months after the end of the day the deposit is made, result in the deposit losing its status as a farm management deposit.
  • 393-15(2)  
    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).

    393-15(3)  
    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.

    Note:

    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.


     

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