Private ruling: Farm management deposit
Date of advice: 6 September 2022
Published: November 2022
Ruling period: Year ended 30 June 2021
Date scheme commenced: 1 July 2020

Ruling: Q1: Are you entitled to a deduction in the 2020-21 financial year for the full amount of your Farm Management Deposit (FMD) under Division 393 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. Having considered your circumstances and the relevant facts. It is accepted that you requested an FMD in the 2020-21 financial year, you met the conditions of a 'farm management deposit' and all relevant requirements outlined in the table in section 393-35 of the ITAA 1997. The Commissioner will allow a deduction in the 2020-21 for the amount of the deposit.

Relevant facts and circumstances: Before 30 June you requested a bank to open a Farm Management Deposit (FMD) account. It was not until after 30 June that the error was detected.by the bank. On this date the FMD account was opened. The bank has provided a letter to confirm their responsibility for the error. The bank is unable to backdate the account opening date to the date your request was made, however they have shorten the maturity date to 12 months expiry from the date of request. The bank has credited you in compensation for their error.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 393-5 | Income Tax Assessment Act 1997 section 393-20 | Income Tax Assessment Act 1997 section 393-35