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Farm management deposits (FMD) are a risk-management tool to help farmers deal with uneven income, which is common in agriculture because of natural disasters, climate and market variability. The FMD 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 an FMD, 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
Consolidating multiple FMDs will have no tax consequences provided you meet the requirements for merging deposits.
To be eligible for the FMD scheme, you must be:
Trustees can only enter FMD agreements 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 FMD tax concessions if either of the following apply:
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