INCOME TAX ASSESSMENT ACT 1997 - SECT 393.15 Transactions to which the deduction, assessment and 12 month rules have modified application

INCOME TAX ASSESSMENT ACT 1997 - SECT 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.

  (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).

  (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.