LOAN (INCOME EQUALIZATION DEPOSITS) ACT 1976 (REPEALED)

***** Repealed 22 February 2005 *****

PART II - MAKING OF DEPOSITS

SECTION 4B   REINVESTMENT OF INTEREST IN RESPECT OF DEPOSITS  

4B(1)  [Application of section]  

If, in the application in respect of a deposit, the depositor elects that he or she wishes interest on the deposit to be reinvested, this section applies to any interest that becomes payable on the deposit.

4B(2)  [Effect of election to reinvest]  

If the depositor in respect of a deposit for which the application was lodged before the commencement of this section elects, at any time, that he or she wishes interest on a specified deposit or specified deposits to be reinvested, this section also applies to any interest that becomes payable on any such deposit after the election is made.

4B(3)  [To whom interest paid]  

If this section applies to any interest, the interest is not to be paid to the person otherwise entitled to it, but is instead to be paid into the Income Equalization Deposits Reserve, where it is to be added to the balance of the deposit to which it relates.

4B(4)  [Reinvested interest deemed part of deposit]  

Subject to paragraph 15A(9)(c) and subsection 18B(3), interest added to the balance is taken for all purposes of this Act (other than the liability to pay interest in respect of any period before it was added to the balance) to be, and always to have been, part of the deposit to which it relates. (For example, this will mean that a request under section 17 can be made in respect of the whole deposit even if the interest was added less than 12 months before.)

4B(5)  [Effect on farm management bond]  

To the extent that the interest relates to the investment component of a farm management bond, the adding of the interest to the balance of the deposit also increases the farm management bond by the same amount. However, this only happens to the extent that it does not cause the total of the balances of all farm management bonds of the owner to be more than $150,000.

4B(6)  [When subsec (3) not applicable]  

Subsection (3) does not apply to the interest to the extent that, if it were added to the deposit, the total of the balances of all deposits in relation to the owner would be more than $300,000.

4B(7)  [Interest payable after 2 April 1999]  

This section does not apply to interest that becomes payable more than 3 months after the end of the day on which the Taxation Laws Amendment (Farm Management Deposits) Act 1998 commences.