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  • Farm Management Deposits scheme

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    The scheme is designed to reduce fluctuations in primary producer' incomes. Income can be deposited during prosperous years and withdrawn during less prosperous years. Farm management deposits (FMDs) are deductible in the year in which they are made.

    If you withdraw FMDs for which you have previously claimed a tax deduction, the withdrawals are treated as assessable income in the year in which they are made.

    The basic rules of the schemes are:

    • FMDs must be in multiples of $1,000 and must be made by 30 June to qualify for a deduction in that income year
    • the minimum deposit or withdrawal is $1,000; the total of all deposits at any one time cannot exceed $300,000
    • interest on FMDs is assessable in the financial year in which it is paid
    • the tax deduction allowed for FMDs-including interest reinvested-in any income year is limited to the taxable income derived from a business of primary production in that year
    • you cannot claim a deduction for an FMD if your other non-primary production income is greater than $50,000.

    FMDs are a commercial product offered by suitable financial institutions but coordinated by the Commonwealth Department of Agriculture, Forestry and Fisheries-Australia (AFFA). If you require more information or advice contact your financial adviser or ring AFFA on freecall 1800 808 869.

    Last modified: 28 Oct 2003QC 27383