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Edited version of private advice
Authorisation Number: 1052333248727
Date of advice: 20 November 2024
Ruling
Subject: Farm management deposits
Question
Are you entitled to a deduction in 202X-2Y for the full amount of your Farm Management Deposit (FMD) under Division 393 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes. Having considered your circumstances and the relevant facts. It is accepted that you made a FMD in 202X-2Y and you met the conditions of a 'farm management deposit' and all relevant requirements outlined in the table in section 393-35 of the ITAA 1997. It was a bank error which inadvertently repaid this amount to you early in 202Y-2Z. The bank corrected the error by establishing a new FMD but were unable to amend the establishment date to 202X-2Y. The Commissioner will allow a deduction in 202X-2Y for the amount of the deposit.
This ruling applies for the following period:
Year ended 30 June 202Y
The scheme commenced on:
1 July 202X
Relevant facts and circumstances
You carry on a business of primary production via a partnership.
Your taxable non primary production income was less than $XXX in 2023-24.
You have not been declared bankrupt.
You established a FMD of $A with a bank.
Early the following financial year you instructed the bank to repay a separate FMD of $B.
The bank, in error, repaid the $A FMD to you.
The bank corrected the error by establishing a new FMD for the $A.
You have provided a copy of a letter from the bank confirming their responsibility for the error.
The bank was unable to amend the establishment date of the FMD to the original date.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 393-5
Income Tax Assessment Act 1997 section 393-20
Income Tax Assessment Act 1997 section 393-35