INCOME TAX ASSESSMENT REGULATIONS 1997

Schedule 1C  

(regulation 393-10 )

FARM MANAGEMENT DEPOSITS: STATEMENTS TO BE READ BY DEPOSITORS

Part 2 - Required statements  

3   Important requirements for farm management deposits  
Some of the requirements for farm management deposits are summarised below. There are also other requirements set out in the Act. A breach of some of the requirements will result in the deposit not being treated as a farm management deposit, and the tax benefits will be lost.

  • · The owner must be an individual who is carrying on a primary production business in Australia when the deposit is made.
  • · The deposit must be made by only one individual and on behalf of only one individual.
  • · Rights of the depositor must not be transferable to another entity.
  • · The deposit must not be used as security for any amount that the depositor or any other entity owes to the FMD provider or any other entity.
  • · Interest or other earnings on the deposit must not be invested as a farm management deposit with the FMD provider without having first been paid to the depositor.
  • · If the depositor requests in writing, the FMD provider must electronically transfer the deposit, or part of the deposit, to another FMD provider that agrees to accept it as a farm management deposit.
  • · The FMD provider must not deduct any fees from the principal of a farm management deposit. However, it may charge fees on the deposit.



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