Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS

Division 393 - Farm management deposits

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

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SECTION 393-40 Repayment of deposit within first 12 months

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Partial repayment within first 12 months

393-40(1)

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Any part of a deposit repaid before the last day of the 12 months after the day the deposit is made is not, and is taken never to have been, part of a farm management deposit .

Note 1:

A repayment covered by subsection (3), (3A) or (5) is disregarded in applying this subsection. The normal rules in sections 393-5 (about deductions for making a farm management deposit) and 393-10 (about assessability of the repayment of a farm management deposit) apply instead.

Note 2:

This subsection does not apply if a deposit is reinvested, the term of a deposit is extended, or a deposit is transferred at the depositor ' s request: see section 393-15 .

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History

S 393-40(1) amended by No 52 of 2016, s 3 and Sch 3 item 10, by substituting " subsection (3), (3A) " for " subsection (3A) " in note 1, applicable to assessments for the 2016-17 income year and later income years.

S 393-40(1) amended by No 13 of 2014, s 3 and Sch 2 item 49, by omitting " (3), " after " covered by subsection " in note 1, applicable in relation to payments made after 1 July 2014, other than any such payment that relates to a day before 1 July 2014.

S 393-40(1) amended by No 84 of 2013, s 3 and Sch 8 item 30, by substituting " before the last day of the 12 months after " for " within 12 months after the end of " , effective 28 June 2013. No 84 of 2013, s 3 and Sch 8 item 31 contains the following application provision:

31 Application of amendments
(1)
The amendments made by item 30 apply to assessments for the 2010-11 income year and later income years.

(2)
Former subsection 393-37(1) in Schedule 2G to the Income Tax Assessment Act 1936 , as inserted by Part 1 of Schedule 1 to the Taxation Laws Amendment (Earlier Access to Farm Management Deposits) Act 2002 , is taken to always have applied as if the references in that former subsection to:

(a) within 12 months; and

(b) within the 12 months;
were references to before the last day of the 12 months.

(3)
Former subsections 393-37(1) and (2) in Schedule 2G to the Income Tax Assessment Act 1936 , as inserted by Part 2 of Schedule 1 to the Taxation Laws Amendment (Earlier Access to Farm Management Deposits) Act 2002 , are taken to always have applied as if the references in those former subsections to within the 12 months were references to before the last day of the 12 months.

S 393-40(1) amended by No 147 of 2011, s 3 and Sch 5 item 3, by inserting " , (3A) " in note 1, applicable in relation to repayments made on or after 1 July 2010.

Deposit not to be reduced to less than $1,000 within first 12 months

393-40(2)

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A deposit is not, and is taken never to have been, a farm management deposit if the amount of the deposit is reduced to less than $1,000 because of one or more repayments before the last day of the 12 months after the day the deposit is made.

Note 1:

A repayment covered by subsection (3), (3A) or (5) is disregarded in applying this subsection.

Note 2:

This subsection does not apply if a deposit is reinvested, the term of a deposit is extended, or a deposit is transferred at the depositor ' s request: see section 393-15 .

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Repayment in the event of severe drought

393-40(3)

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Subsections (1) and (2) do not apply to a repayment of the whole or a part of a *farm management deposit if:

(a) the *owner of the deposit carries on a *primary production business that satisfies one or more of paragraphs (a), (b), (c) and (f) of the definition of primary production business in subsection 995-1(1) ; and

(b) any of the land on which the owner of the deposit carries on any primary production business that satisfies one or more of those paragraphs has, for the period specified in subsection (3AA), had rainfall that:

(i) is deficient to an extent prescribed by the regulations; or

(ii) if there are no such regulations - is within the lowest 5% of rainfall for that land according to records held by the Commonwealth Bureau of Meteorology; and

(c) for the period specified in subsection (3AA):

(i) the owner of the deposit has carried on, on that land, a primary production business that satisfies one or more of those paragraphs; and

(ii) the amount of the repayment has been held in that farm management deposit.

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393-40(3AA)

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For the purposes of paragraphs (3)(b) and (c), the period is:

(a) a period prescribed by the regulations; or

(b) if there are no such regulations - the most recent period of 6 consecutive months:

(i) that precede the repayment; and

(ii) for which rainfall records held by the Commonwealth Bureau of Meteorology are publicly available at the time of the repayment.

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Repayment in the event of an applicable natural disaster

393-40(3A)

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Subsections (1) and (2) do not apply to a repayment of the whole or a part of a *farm management deposit if:

(a) natural disaster relief and recovery arrangements made by or on behalf of the Commonwealth apply, in a way specified in regulations made for the purposes of this subsection, to a *primary production business of the *owner of the deposit; and

(b) all of the other circumstances specified in those regulations are satisfied.

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Any later deposit not a farm management deposit

393-40(4)

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If subsection (3) or (3A) applies to an *owner and a repayment, any later deposit that is made by, or on behalf of, the owner in the income year in which the repayment is made is not, and is taken never to have been, a farm management deposit .

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Repayment in the case of death, bankruptcy or ceasing to carry on a primary production business

393-40(5)
Subsections (1) and (2) do not apply to a repayment of a *farm management deposit because of the requirement contained in the relevant agreement as set out in item 11 of the table in section 393-35 (death, bankruptcy etc.).

Certain transactions do not affect the day the deposit was made

393-40(6)
Subsections (1) to (4) apply as if a *farm management deposit that:

(a) is made as a result of a transaction mentioned in subsection 393-15(1) (about reinvesting a deposit, extending the term of a deposit and transferring a deposit at the depositor ' s request); or

(b) is affected by such a transaction;

were made on the day on which the original deposit was made.

Example:

A farm management deposit is made on 1 July 2010 for a term of 6 months, but is extended in December 2010 for another 6 months. For the purposes of subsections (1) to (4), the day the extended deposit was made remains as 1 July 2010.

Note:

Section 393-40 of the Income Tax (Transitional Provisions) Act 1997 provides for a special rule for deposits transferred under the repealed Loan (Income Equalization Deposits) Act 1976 .

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