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INCOME TAX ASSESSMENT ACT 1997 - SECT 393.15

Transactions to which the deduction, assessment and 12 month rules have modified application

  (1)   The provisions mentioned in subsection   (2) do not apply in relation to the following transactions:

  (a)   the immediate reinvestment of a * farm management deposit as a farm management deposit with the same * FMD provider;

  (b)   the extension of the term of a farm management deposit (even if other terms such as those relating to interest payable are also varied);

  (c)   the transfer of a farm management deposit in accordance with a requirement of the relevant agreement as set out in item   13 of the table in section   393 - 35 (which allows for transfers of deposits at the request of the depositor).

Note:   This means that these transactions:

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

(b)   will not give rise to a deduction; and

(c)   will not, if the transaction occurs within 12 months after the end of the day the deposit is made, result in the deposit losing its status as a farm management deposit.

  (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); and

  (c)   subsections   393 - 40(1) and (2) (about repayment of a farm management deposit within the first 12 months); and

  (ca)   subsection   393 - 40(3) (about repayment of a farm management deposit in the event of severe drought); and

  (d)   subsections   393 - 40(3A) and (4) (about repayment of a farm management deposit in the event of an applicable natural disaster).

  (3)   For the purposes of working out the * unrecouped FMD deduction for a deposit that is subject to a transaction mentioned in subsection   (1), the transaction does not cause the deposit to be a different deposit.

Note:   This ensures that the unrecouped FMD deduction (which affects how much income tax is assessed in the event of a repayment) equals the deduction for the original deposit, less any amount included in your assessable income because of a previous repayment of the deposit.



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