15Farm management bonds

15 Farm management bonds

(1) Subject to this section, when making a deposit on or after 1 October 1992, the depositor may elect in the application form that the deposit, or a specified part of the deposit, is to be a farm management bond. (2) Subject to this section, the depositor in respect of a deposit made before l October 1992 may, at any time, elect that the deposit, or a specified part of the deposit, is, after the election is made, to be a farm management bond. (3) If the depositor specifies a part of a deposit, the part must be $1,000 or a multiple of $1,000. (4) An election under this section does not have effect: (a) unless the taxable non‑primary‑production income of the owner of the deposit for the year of income in which the election is made is less than $50,000; and (b) to the extent that it results in the total of the balances of all farm management bonds of the owner being more than $150,000; and (c) to the extent that the amount of the deposit or the part is not allowable under section 159GC of the Assessment Act as a deduction from the assessable income of the owner. (5) If the authorised person is satisfied that an election was not effective because paragraph (4)(a) or (b) was not satisfied, the authorised person must: (a) advise the depositor in writing of the fact; and (b) in the advice, ask whether the depositor wishes to request repayment of the deposit or the part of the deposit concerned under any provision of this Act that may be applicable. (6) If a deposit that consists partly of a farm management bond is repaid in part, the repayment is taken to be made first from the part that is not a farm management bond.