ato logo
Search Suggestion:

Repayments

Use this guide to work out if you are eligible to claim.

Last updated 27 June 2018

Natural disaster assistance and 'early repayment'

You can access your deposits early, without losing your concessional tax treatment, if you are eligible to claim the natural disaster assistance exception. That is, if:

  • you made the original deposit before a natural disaster declaration was made
  • your primary production business received Natural Disaster Relief and Recovery Arrangements (NDRRA) Category C assistance, and
  • you withdrew the FMD deposit early, after you received the NDRRA Category C assistance.

To confirm that your business is eligible, or has received this type of assistance, review your disaster assistance documents. For more information about this natural disaster exception, go to agriculture.gov.au/agriculture-food/drought/assistance/fmdExternal Link

If you claim the exception, you cannot claim a deduction for deposits you made in 2017–18 after the early repayment.

Drought and 'early repayment'

You can access your deposits early, without losing your concessional tax treatment, if you are eligible to claim the drought exception. You are able to claim this exemption if:

  • for six consecutive months an area of your primary production property has been affected by rainfall that is within the lowest 5% of recorded rainfall for that area of your property
  • publicly available rainfall records held by the Bureau of Meteorology confirm this low rainfall for the period of six consecutive months preceding the month in which the repayment is made, and
  • for that six month period
    • you held the deposit
    • you are not involved solely in primary production industries like fishing, pearling, tree felling or tree transporting.

You can determine if your primary production property meets the rainfall requirements at a particular time by using the FMD rainfall analyserExternal Link on the Department of Agriculture, Fisheries and Forestry website.

To obtain your concessional tax treatment you need to ensure that any repayment of your deposit occurs before the end of the month immediately following that six month drought period.

If you claim the exception, you cannot claim a deduction for deposits you made in 2017–18 after the early repayment.

Repayments are assessable income

You must include repayments of previously deducted deposits as assessable income in the income year they are repaid.

Do not include as assessable income repayments of deposits that you did not claim as a deduction.

When you receive a repayment, you are considered to have been repaid any non-deductible amounts first.

Reinvesting, extending or transferring deposits

You do not need to include as assessable income:

  • reinvested deposits, or extensions of the term of deposits with the same provider
  • merged deposits provided certain conditions are met
  • transfers of the same deposit amount from one FMD provider to another; examples of this include
    • electronic transfers from a liquidated authorised deposit-taking institution (ADI) to a new ADI
    • transfers by the Australian Prudential Regulatory Authority under the Financial Claims Scheme.

Deceased estate

If you are looking after the estate of someone who died in 2017–18, you cannot claim a deduction for any deposits they made in 2017–18. Any farm management deposits held at the time of death are assessable income in 2017–18 to the extent they were previously claimed as a deduction.

Deductions in earlier years are not affected even when the person dies within 12 months of making the deposit.

QC55657