Private ruling: Income
Published: December 2013
Ruling period: Year ended 30 June 2012 | Year ended 30 June 2013
Date scheme commenced: 1 July 2011

Ruling: Q1: Can you include your repayment of a farm management deposit as income in the 2011-12 year of income where the repayment was made in July 2012? | A1: No.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You had a farm management deposit (FMD). You instructed your bank to repay the FMD in June 20XX which was the maturity date. The bank did not withdraw the money until July 20XX. The bank has informed you in writing that it was their error. You included the FMD withdrawal in your 2011-12 income tax return.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 393-10.

Reasons for decision: Summary: Section 393-10 of the Income Tax Assessment Act 1997 states that where an FMD is repaid during a year of income, you are required to include, as assessable income, an amount that equals the deductible amount previously allowed in respect of the deposit in the repayment year. The assessable amount is limited to the "unrecouped FMD deduction", which will generally be that part of a deposit for which a deduction has been claimed but which has yet to be included in assessable income on repayment. When an FMD is repaid, the amount of the deduction previously allowed is included in both the primary producer's PAYG instalment income and assessable income in the repayment year. Within this Division there is no discretion provided to the Commissioner to allow exceptions to the rules therein. Although the bank confirms the responsibility for the error was theirs, they are unable to backdate the FMD repayment date to the date they originally received your instructions. Therefore, the income must be included in the 2012-13 financial year.