LOAN (INCOME EQUALIZATION DEPOSITS) ACT 1976 (REPEALED)

***** Repealed 22 February 2005 *****

PART IIIA - CLOSING THE DEPOSIT SCHEME

SECTION 25B   TRANSFER OF DEPOSITS TO FINANCIAL INSTITUTIONS  

25B(1)  [Obligation to make deposits]  

Subject to subsection (2), if:

(a)  before the end of 30 November 1999, a depositor makes a request in writing to the authorised person to re-deposit on behalf of the depositor, as separate farm management deposits with a specified financial institution, every deposit of the depositor; and

(b)  the request is accompanied by any information, and the form, that the authorised person requires for the purpose of making the deposits on behalf of the depositor with the financial institution; and

(c)  the financial institution accepts the deposits as farm management deposits;

the authorised person must make the deposits in accordance with the request, and the amount required for the authorised person to do so must be paid out of moneys standing to the credit of the Income Equalization Deposits Reserve.

25B(2)  [Effect of certain declarations]  

Subsection (1) does not apply to a deposit to the extent that it is repayable because of a declaration under section 18B, 19 or 20.

25B(3)  [Effects of making deposits]  

If the authorised person makes the deposits:

(a)  each deposit or part ceases to be such under this Act; and

(b)  for the purposes of section 20B, and section 159GD of the Assessment Act, giving effect to the request does not involve a repayment of the deposit by the authorised person; and

Note:

This means that the transfer will not be subject to a deduction under section 20B and the owner will not be assessed for income tax purposes because of the transfer.

(c)  for the purposes of section 393-10 of Schedule 2G to the Assessment Act, giving effect to the request does not involve the making of a deposit with the financial institution; and

Note:

This means that the transfer will not give rise to an income tax deduction.

(d)  for the purposes of any application of section 221ZXB of the Assessment Act, or section 393-15 of Schedule 2G to the Assessment Act, in relation to the deposit (including the deposit as affected by paragraph 393-50(5)(c) of the Assessment Act) after it is made with the financial institution, the unrecouped FMD deduction in respect of the deposit at any time before the first or only repayment of any of the deposit is equal to the amount of the unrecouped deduction (within the meaning of subsection 159GA(3) of the Assessment Act) in respect of the deposit immediately before it ceased to be a deposit under this Act.

Note:

This means that the unrecouped deduction relating to the deposit under this Act continues to apply (by becoming an unrecouped FMD deduction) when the deposit is transferred to a financial institution as a farm management deposit.