Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p7
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 7/11)
Character Range: 5489473–5492237

at a time before any part of the deposit has been repaid is the sum of the unrecouped FMD deductions in respect of each of the original deposits just before the reinvestment occurred.
 (4) Section 393‑40 (about the repayment of farm management deposits within 12 months) applies as if the new *farm management deposit was made on the same day that the most recent of the original deposits was made.

393‑17  Tax consequences of liabilities reducing because of farm management deposits
 (1) To avoid doubt, if amounts of interest payable by the *owner of a *farm management deposit, or by a partnership of which the owner is a partner, to the *FMD provider in respect of loans or other debts of the owner or partnership fall short of what they otherwise would be because the owner holds the farm management deposit, then:
 (a) any income of the owner or partnership comprising the shortfall is neither assessable income nor *exempt income of the owner or partnership; and
 (b) any amount that any person:
 (i) is not liable to pay because of the shortfall; and
 (ii) could have, apart from this section, deducted under this Act;
  is not deductible.
 (2) However, this section applies only to the extent that the loans or other debts relate to a *primary production business that the *owner or partnership carries on.

Subdivision 393‑B—Meaning of farm management deposit and owner

Table of sections
393‑20 Farm management deposits
393‑25 Owners of farm management deposits
393‑27 Trustee may choose that a beneficiary is a chosen beneficiary of the trust
393‑28 Application of Division to beneficiary no longer under legal disability
393‑30 Effect of contravening requirements
393‑35 Requirements of agreement for a farm management deposit
393‑37 Agreements for a farm management deposit may allow for some offsets of a depositor's liabilities
393‑40 Repayment of deposit within first 12 months
393‑45 Partly repaid farm management deposits

393‑20  Farm management deposits

Meaning of farm management deposit
 (1) A deposit with an *FMD provider is a farm management deposit if:
 (a) the depositor applies to make the deposit in accordance with subsection (2); and
 (b) the deposit is made under an agreement between the FMD provider and the depositor that:
 (i) describes the deposit as a farm management deposit; and
 (ii) at all times while the deposit is with the FMD provider, contains requirements to the effect set out in the table in section 393‑35.
The agreement may also contain additional requirements that are not inconsistent with those set out in that table.

Depositor to provide information in application form
 (2) For the purposes of paragraph (1)(a), the depositor must apply to the *FMD provider to make the deposit by completing and signing