Private ruling: Farm Management Deposit
Date of advice: 24 March 2026
Published: 18 May 2026
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 25 June 20XX

Ruling: Q1: Are you required to include a Farm Management Deposit (FMD) repayment in your assessable income for the year ended 30 June 20XX, if an error was made by the financial institution as your request was not acted upon correctly? | A1: No, having considered your circumstances and the relevant facts, it is accepted that you requested the repayment of the FMD to be made on 1 July 20XX, but the bank incorrectly processed the repayment before 1 July 20XX. You are not required to include the FMD repayment in your assessable income for the year ended 30 June 20XX. | Q2: On the assumption that the above question is no, is the taxpayer required to include a FMD repayment in their assessable income for the year ended 30 June 20XX? | A2: Yes, having considered your circumstances and the relevant facts, it is accepted that you requested the FMD repayment to be made on 1 July 20XX, meaning you are required to include the FMD repayment in your assessable income for the year ending 30 June 20XX.

Relevant facts and circumstances: A farm management deposit (FMD) was made in a previous income year and included as a deduction in that income year tax return of both taxpayers. Before the end of the following financial year, the taxpayers both Taxpayer's contacted the financial institution to request that the FMD be repaid upon maturity. The following day, the taxpayer's contacted the financial institution to amend prior instructions and request that the FMD be repaid on 1 July so it would fall in the following income year. On 30 June 20XX it came to the taxpayer's attention that the financial institution had not followed the amended instruction to repay the FMD on 1 July and had in error processed the repayment of the FMD before the end of the income year. The same day the Taxpayers uncovered the error, they contacted the financial institution to rectify the error, however the financial institution advised there was insufficient time to amend their error prior to close of business on 30 June 20XX or to process the new deposit. The taxpayer also approached other financial institutions to determine if they could process a new FMD, however they also advised there was insufficient time. The taxpayers lodged a complaint to the financial institution. In response to the complaint, the financial institution wrote to the taxpayers in a letter dated 30 July 20XX acknowledging that the failure to repay the FMD in full on 1 July 20XX was a result of their error and apologised for their actions.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 393-5 | Income Tax Assessment Act 1997 section 393-10