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 following changes have recently been made to the FMD scheme:
- FMDs no longer have to be a 12-month fixed term deposit but can be held in deposits of any term, provided no part of the amount is withdrawn within 12 months from the date of deposit. This applies retrospectively to deposits made on or after 2 January 1999.
- From 1 July 2002, you can withdraw part of an FMD within 12 months of making the deposit without losing the benefit of the tax deduction for the remaining amount. This residual amount still qualifies for an FMD deduction, provided it remains in the account for at least 12 months and does not fall below $1,000. A deduction is not allowable for the part of the deposit that is withdrawn. Where this affects a deduction you claimed in the prior year, you need to request an amendment of your assessment for that income year.
- From 1 July 2002, certain FMD holders can withdraw deposits early and still retain the tax deduction in the income year in which the deposit was made. This concession applies if, at the time of the withdrawal, you operate your primary production business in an area covered by an exceptional circumstances (EC) declaration made by the Minister for Agriculture, Fisheries and Forestry. To confirm your EC status, you have until three months after the end of the income year in which the withdrawal is made to obtain an EC certificate from the relevant state authority. This is to ensure that primary producers will be able to take advantage of the EC concession prior to the certificate being issued. The amount of the withdrawal is assessable in the income year in which the withdrawal is made, and you cannot claim a deduction for any subsequent deposits made in the same income year.
For more information on these changes, see the fact sheet Farm Management Deposit Scheme: Earlier access to farm management deposits.
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 on the taxation requirements for FMDs, contact the Business infoline on 13 28 66.
Last modified: 09 Feb 2006QC 27451