Private ruling: Farm management deposits
Date of advice: 20 November 2024
Published: 13 January 2025
Ruling period: Year ended 30 June 202Y
Date scheme commenced: 1 July 202X

Ruling: Q1: Are you entitled to a deduction in 202X-2Y 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 made a FMD in 202X-2Y and 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. It was a bank error which inadvertently repaid this amount to you early in 202Y-2Z. The bank corrected the error by establishing a new FMD but were unable to amend the establishment date to 202X-2Y. The Commissioner will allow a deduction in 202X-2Y for the amount of the deposit.

Relevant facts and circumstances: You carry on a business of primary production via a partnership. Your taxable non primary production income was less than $XXX in 2023-24. You have not been declared bankrupt. You established a FMD of $A with a bank. Early the following financial year you instructed the bank to repay a separate FMD of $B. The bank, in error, repaid the $A FMD to you. The bank corrected the error by establishing a new FMD for the $A. You have provided a copy of a letter from the bank confirming their responsibility for the error. The bank was unable to amend the establishment date of the FMD to the original date.

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