Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT (NO. 8) 2003 NO. 107, 2003 - SCHEDULE 6

Income Tax Assessment Act 1936

1 Section 393-25 of Schedule 2G

entity has the same meaning as in the Income Tax Assessment Act 1997 .

2 Section 393-25 of Schedule 2G (definition of financial institution )

financial institution means an entity that:

(a) is an ADI (authorised deposit-taking institution) for the purposes of the Banking Act 1959 ; or
(b) carries on in Australia the business of banking, so long as a State or a Territory guarantees the repayment of any deposit taken in the course of that business; or
(c) carries on in Australia a business that consists of or includes taking money on deposit, so long as a State or a Territory guarantees the repayment of any deposit taken in the course of that business.

Note: An entity can also be a financial institution for the purposes of this Subdivision in the limited circumstances described in section 393-52.

3 Application

4 At the end of Subdivision 393-B of Schedule 2G

393-52 Certain entities taken to be financial institutions for pre-1 July 2003 deposits and transfers

Scope

(1) This section applies if the condition in subsection (2) or (3) is satisfied.
(2) The condition in this subsection is satisfied if:
(a) a deposit (the eligible deposit ) of money was made before 1 July 2003 with an entity (the non-complying entity ) that was not a financial institution; and
(b) if the deposit was made after 17 June 2003:
(i) the deposit was made in accordance with an agreement of a particular kind; and
(ii) on 17 June 2003, the non-complying entity was offering to enter into agreements of that kind; and
(iii) the agreements mentioned in subparagraph (ii) described such a deposit as a farm management deposit; and
(c) the deposit was made in good faith.
(3) The condition in this subsection is satisfied if:
(a) the depositor of a farm management deposit made a written request before 1 July 2003 to the financial institution with which the deposit was made to transfer the deposit to an entity (the non-complying entity ); and
(b) the financial institution transferred the deposit to the non-complying entity within a reasonable period after the request; and
(c) the non-complying entity was not a financial institution when the deposit was transferred; and
(d) the condition in subsection (2) is not satisfied in relation to the deposit (the eligible deposit ) arising from the transfer to the non-complying entity; and
(e) if the request was made after 17 June 2003:
(i) the eligible deposit was made in accordance with an agreement of a particular kind; and
(ii) on 17 June 2003, the non-complying entity was offering to enter into agreements of that kind; and
(iii) the agreements mentioned in subparagraph (ii) described such a deposit as a farm management deposit; and
(f) the request was made in good faith.

Non-complying entity taken to be financial institution

(4) This Subdivision (other than this section) applies in relation to the eligible deposit as if the non-complying entity were a financial institution throughout the period:
(a) beginning:
(i) if the condition in subsection (2) is satisfied—when the eligible deposit was made; or
(ii) if the condition in subsection (3) is satisfied—when the eligible deposit was transferred as mentioned in paragraph (3)(b); and
(b) ending:
(i) if the depositor makes, before the deadline mentioned in subsection (6), a written request to the non-complying entity to transfer the eligible deposit to a financial institution, and that transfer is made within a reasonable period after the request—at the time the transfer is made; or
(ii) if subparagraph (i) does not apply and the eligible deposit was repaid in full before that deadline—at the time the eligible deposit was repaid; or
(iii) in any other case—immediately before that deadline.

Deposit taken to be repaid in certain circumstances

(5) If:
(a) the depositor fails, before the deadline mentioned in subsection (6), to make a written request to the non-complying entity to transfer the eligible deposit to a financial institution; or
(b) if such a request is made—the non-complying entity fails to transfer the eligible deposit to that financial institution within a reasonable period after the request;