Reporting farm management deposits

The farm management deposits (FMD) scheme enables primary producers to deduct from their assessable income the amount of farm management deposits made in an income year. This helps them manage their exposure to seasonal fluctuations by shifting before-tax income to years when it is most needed.

Investment bodies are required to report in the AIIR:

• interest paid or credited to FMD accounts during the financial year
• movements of principal amounts in FMDs
• closing balance of the FMD account as at 30 June
• investor details and the TFNs or ABNs quoted by investors.

Limits for FMDs

An FMD must be a minimum of $1,000 and a maximum of $800,000.

There is no minimum term, but if the deposit is withdrawn within 12 months the depositor may not be allowed a deduction for the deposit.

An FMD can be held by only one person.

Paying and reporting interest

Interest owing to the FMD holder must be paid separately to the FMD holder and cannot be included (compounded) in the principal. Interest payments can form part of a new FMD, provided the depositor meets the FMD scheme's eligibility criteria.

Interest income from an FMD is required to be reported in the income year it is paid.

Transferring deposits

FMDs can be transferred between investment bodies. Deposits must be transferred electronically to maintain their FMD status.

Next steps:

• Due date for AIIR
• Lodging the AIIR

See also:

• Farm management deposits scheme