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  • Farm Management Deposits Scheme



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

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    The scheme is designed to reduce fluctuations in primary producers' 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 Income can be deposited during prosperous years and withdrawn during less prosperous years.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. To retain the tax benefits of an FMD, no part of the deposit can be withdrawn in the first 12 months after it is deposited.

    The basic rules of the scheme are:

    • The owner of the deposit must be a primary producer when the deposit is made.
    • The deposit must be made by a singular person. Deposits by 2 or more persons jointly or made on behalf of 2 or more persons will not be recognised as an FMD.
    • FMDs 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 held at any one time cannot exceed $300,000.
    • Interest on FMDs is assessable in the income 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, Fisheries and Forestry-Australia (AFFA). If you require more information or advice, contact your financial adviser or ring AFFA on freecall 1800 808 869 or log onto the AFFA FMD homepage at Link

    Last modified: 28 Oct 2003QC 27421