Tax Laws Amendment (Transfer of Provisions) Act 2010 (79 of 2010)

Schedule 4   Farm management deposits

Part 3   Application and transitional provisions

Income Tax (Transitional Provisions) Act 1997

50   After Division 392

Insert:

Division 393 - Farm management deposits

Table of Subdivisions

393-A Tax consequences of farm management deposits

393-B Meaning of farm management deposit and owner

Subdivision 393-A - Tax consequences of farm management deposits

Table of sections

393-1 Application of Division 393 of theIncome Tax Assessment Act 1997

393-5 Unrecouped FMD deduction

393-10 Unrecouped FMD deduction for deposits made as a result of section 25B of theLoan (Income Equalization Deposits) Act 1976

393-1 Application of Division 393 of the Income Tax Assessment Act 1997

Division 393 of theIncome Tax Assessment Act 1997 (about farm management deposits) applies to assessments for:

(a) the 2010-11 income year; and

(b) later income years.

393-5 Unrecouped FMD deduction

A reference in Division 393 of theIncome Tax Assessment Act 1997 to a deduction under section 393-5 of that Act for making a farm management deposit is taken to include a reference to a deduction under section 393-10 in Schedule 2G to theIncome Tax Assessment Act 1936, as in force just before the commencement of this section, if the deposit was made before the 2010-11 income year.

393-10 Unrecouped FMD deduction for deposits made as a result of section 25B of the Loan (Income Equalization Deposits) Act 1976

Despite subsection 393-10(2) of theIncome Tax Assessment Act 1997, if:

(a) no part of a farm management deposit has been repaid before a particular time; and

(b) the deposit was made with an FMD provider as a result of a request to which section 25B of theLoan (Income Equalization Deposits) Act 1976, as in force on 21 February 2005, applied;

the unrecouped FMD deduction in respect of the deposit at that time is equal to the amount of the unrecouped deduction (within the meaning of the former subsection 159GA(3) of theIncome Tax Assessment Act 1936) in respect of the deposit immediately before it ceased to be a deposit under theLoan (Income Equalization Deposits) Act 1976.

Note: This means that the unrecouped deduction relating to the deposit under theLoan (Income Equalization Deposits) Act 1976 continues to apply (by becoming an unrecouped FMD deduction) when the deposit is transferred to an FMD provider as a farm management deposit. TheLoan (Income Equalization Deposits) Act 1976 was repealed on 22 February 2005.

Subdivision 393-B - Meaning of farm management deposit and owner

Table of sections

393-40 The day the deposit was made for deposits made as a result of section 25B of theLoan (Income Equalization Deposits) Act 1976

393-40 The day the deposit was made for deposits made as a result of section 25B of the Loan (Income Equalization Deposits) Act 1976

If a farm management deposit was made with an FMD provider as a result of a request under section 25B of theLoan (Income Equalization Deposits) Act 1976, as in force on 21 February 2005, then:

(a) subsections 393-40(1) to (4) of theIncome Tax Assessment Act 1997apply as if the day the deposit was made was the day on which the deposit was originally made under theLoan (Income Equalization Deposits) Act 1976; and

(b) subsection 393-40(6) does not apply to the deposit.

Note: TheLoan (Income Equalization Deposits) Act 1976 was repealed on 22 February 2005.