Private ruling: Farm management deposits
Date of advice: 5 August 2015
Published: August 2015
Ruling period: Year ended 30 June 2015.
Date scheme commenced: 1 July 2014

Ruling: Q1: Will the Commissioner accept the farm management deposits as having been made during the 2014-15 financial year? | A1: Yes.

Relevant facts and circumstances: During the 2014-15 income year you, arranged for farm management deposits (FMDs) to be made. You received notification that the deposits for the FMDs were received on during the 2014-15 income year. However, the funds were not withdrawn from the source bank account until the 2015-16 financial year.

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

Reasons for decision: Summary: Subsection 393-5(1) of the Income Tax Assessment Act 1997 allows an individual taxpayer to deduct the amount of a farm management deposit which they make for during an income year provided certain conditions are met. In your case we accept that the deposits into the FMDs were made during the 2014-15 financial year. Your instructions to establish the FMD's were made during the 2014-15 income year. Although the physical transfer of funds did not occur until the 2015-16 income year given that the financial institution have recorded in their accounts that the FMD deposits occurred during the 2014-15 income year, the Commissioner will accept the date the deposit was made during the 2014-15 income year.