Private ruling: Income tax - farm management deposit
Date of advice: 16 December 2019
Published: February 2020
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 01 July 20XX

Ruling: Q1: Are you entitled to a deduction in the 20XX-XX financial year for the full amount of your Deposit under Division 393 of Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. After reviewing the documentation it is considered that there was an agreement between you and the bank that met the conditions of a 'farm management deposit' and all the relevant requirements outlined in the table in section 393-35 of the ITAA 1997 were satisfied. The Commissioner will allow a deduction in the 20XX-20XX for the amount of the deposit.

Relevant facts and circumstances: You applied for a FMD in your name. You are an individual carrying on a primary production business in Australia with your taxable non-primary production income being less than $100,000. You have not been declared bankrupt. Due to a bank error the deposit was placed into a different account. The bank rectified the error and back dated the account.

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