Tax Laws Amendment (2014 Measures No. 1) Act 2014 (34 of 2014)

Schedule 1   Farm management deposits

Income Tax Assessment Act 1997

10   After section 393-15

Insert:

393-16 Consolidation of farm management deposits

(1) The provisions mentioned in subsection (2) do not apply in relation to the immediate reinvestment of 2 or more *farm management deposits ( original deposits ) if:

(a) just before the reinvestment occurs the balance of each of the original deposits is equal to the *unrecouped FMD deduction for the deposit; and

(b) the original deposits are immediately reinvested as a single farm management deposit with the same *FMD provider, or with a different FMD provider; and

(c) just before the reinvestment occurs the original deposits have each been held for a period of at least 12 months.

Note: This means that the reinvestment:

(a) will not result in assessable income for the owner; and

(b) will not give rise to a deduction.

(2) The provisions are:

(a) section 393-5 (about deductions for making a farm management deposit); and

(b) subsection 393-10(1) (about assessability of the repayment of a farm management deposit).

(3) Despite paragraph 393-10(2)(a), the unrecouped FMD deduction in respect of the *farm management deposit at a time before any part of the deposit has been repaid is the sum of the unrecouped FMD deductions in respect of each of the original deposits just before the reinvestment occurred.

(4) Section 393-40 (about the repayment of farm management deposits within 12 months) applies as if the new *farm management deposit was made on the same day that the most recent of the original deposits was made.