INCOME TAX ASSESSMENT REGULATIONS 1997
Division 393 of the Act establishes the farm management deposits scheme, which are deposits made with FMD providers in the circumstances described in that Division.
You can deduct a farm management deposit you make if:
The amount of the deposit repaid is included in your assessable income in the income year in which it is repaid. Special rules apply if the deposit is repaid in the event of a severe drought or an applicable natural disaster.
Farm management deposits allow you to carry over income from years of good cash flow and to draw down on that income in years when you need the cash. This enables you to defer the income tax on your taxable primary production income from the income year in which you make the deposit until the income year in which the deposit is repaid.