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Farm management deposits are a risk-management tool to help farmers deal with uneven income, which is common in agriculture because of natural disasters, climate and market changes. The deposits scheme complements other risk-management strategies available to primary producers, such as developing fodder and water reserves, financial planning and diversifying production systems.
If you are a primary producer, this scheme allows you to:
If you withdraw a farm management deposit, the amount of the deduction you claimed is included in your assessable income in the income year the deposit is repaid to you – see Assessable income.
To be eligible for the scheme, you must be carrying on a primary production business at the time you make a deposit.
The scheme is restricted to individuals – companies or other entities are not eligible. Deposits cannot be made by two or more people jointly, or made on behalf of two or more people.
Trustees can only make deposits on behalf of a beneficiary who is entitled to a share of the income of the trust estate and is under a legal disability – for example, if they are a minor.
If you are the beneficiary of a primary production trust that made a loss, you are still considered to be in a business of primary production, and eligible for the farm management deposit tax concessions if either of the following apply:
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