Private ruling: Non-commercial losses - income requirement test
Ruling period: Year ended 30 June 2010
Date scheme commenced: 1 July 2009

Ruling: Q1: Does the repayment of funds from a farm management deposit (FMD) cause you to fail the income requirement under section 35-10(2E) of the Income Tax Assessment Act 1997 (ITAA 1997) | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 393-15(2) of Schedule 2G | Income Tax Assessment Act 1997 Subsection 35-10(2E)

Reasons for decision: Summary: The assessable income that arises from the operation of section 393-15, Schedule 2G of the Income Tax Assessment Act 1936 (repayment of FMD) is considered assessable income "from" the business activity when: (c) applying the loss deferral rule in Division 35, in subsection 35-10(2) of the ITAA 1997; and/or (d) determining whether the assessable income test in section 35-30 of the ITAA 1997 has been satisfied. The income repaid from the FMD is considered to be income from the business activity and your income from unrelated sources is less than $250,000. Therefore, you satisfy the income requirement under section 35-10 (2E).

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns. | Relevant facts: You have conducted a primary production business that has generally been profitable. | Your primary production business made a loss in the 200X-XX year of income. | Over a number of income years, you deposited amounts into FMDs. | All eligibility rules for FMDs have been satisfied. | In the 200X-XX financial year, you withdrew in excess of $3XX,000 from FMDs. | The funds repaid were used for running expenses and to purchase equipment for the primary production activities. | Your other income is approximately $X0,000, consisting of interest, dividend and capital gains income.