Deductible deposits
Your 2017–18 farm management deposits are deductible if you satisfy all of the following:
- your 2017–18 taxable non-primary production income is $100,000 or less
- you were carrying on a primary production business at the time of making the deposit
- if you stopped carrying on a primary production business during the year, you recommenced carrying on such a business within 120 days
- your individual deposits were not less than $1,000 and total deposits not more than $800,000
- your individual deposits did not cause your total FMDs to exceed the $800,000 account limit
- your individual deposits did not exceed the amount of your 2017–18 taxable primary production income
- you held the deposits for at least 12 months or qualify for the early repayment exceptions.
Non-deductible deposits
You cannot claim a deduction for deposits made in 2017–18 if during the year the FMD owner:
- became bankrupt or ceased to carry on a primary production business (including a business that was carried on by a partnership or by a trust) for 120 days or more, or
- died.
If this applies to you or you are the executor of a deceased estate:
- all deposits must be repaid
- include as assessable income any repaid deposits that were previously deducted
- do not claim a deduction for deposits
- made after the business ceased, or
- made in 2017–18 by the now deceased FMD owner.
Deposits repaid within 12 months
You cannot claim a deduction for that part of a deposit repaid within 12 months.
If you withdrew a deposit early (and don't qualify for either of the early repayment exceptions) and made the deposit in this income year, do not include this amount as a deposit or repayment. If, however, you claimed the deduction in a prior income year, request an amendment of your assessment for that income year.
If you withdrew part of your deposit early, you may continue to claim a deduction for that part of the deposit that was held for a full 12 months or more (provided that your total deposits remain $1,000 or more).