Private ruling: Deductibility of farm management deposit
Published: October 2012
Ruling period: Year ended 30 June 2012

Ruling: Q1: Can you claim a deduction for a farm management deposit in the relevant year of income where the deposit was made in the subsequent year of income? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 393-5

Reasons for decision: Summary: The entitlement to a deduction for monies deposited in a farm management account is set out in section 393-5 of the Income Tax Assessment Act 1997 . You can claim a deduction for a deposit in an income year that the deposit is made, providing you meet a number of other eligibility criteria. In your case the deposit has not been made in the relevant year of income, therefore a deduction cannot be claimed in that year. There is no discretion in relation to farm management deposits that the Commissioner can exercise to allow a deduction in a year before the deposit has been made. Providing all other eligibility criteria are met you will be able to claim a deduction for the deposit in the subsequent year of income.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: Your income increased in the relevant year of income as you became entitled to all of the profits of the farming activity. | You were unable to attend your trading bank to request for a farm management deposit to allow for a temporary deduction against the farming income. | You made the deposit in the subsequent year of income.