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Farm Management Deposits (FMDs) help farmers reduce their taxable income in good financial years; enabling risk measures to be set aside and drawn down in less successful financial years, thereby smoothing erratic income flows.
Through FMDs farmers can defer payment of tax on farm income in the year it was earned until further down the track when the funds are withdrawn. Importantly FMDs provide an opportunity to earn interest at an attractive rate.
Primary producers who have a taxable non-primary production income not exceeding $65,000 may claim a deposit as a tax deduction. Individuals who are partners or trust beneficiaries in a primary production business are also eligible.
A deposit must be at least $1,000 and not more than $400,000 and the amount of the deposit must not exceed the primary producer's taxable income for that year.
To retain the tax benefits, no part of the deposit can be withdrawn in the first 12 months after it is deposited unless:
- the owner is in an 'Exceptional Circumstances' area and the deposit was made prior to EC declaration;
- the owner dies, becomes bankrupt or ceases to be a primary producer for 120 days or more;
- the deposit is transferred to another financial instituion that agrees to accept the deposit as a FMD.
Interest rates are available on request.
Printed material is available from any Rural Finance office and can be downloaded by clicking the PDF link(s) below:
 Farm Management Deposit Application (49Kb)
FMD Terms and Conditions (38Kb)
Roll Over Details (46Kb)
If you require an alternative to a pdf please contact marketing@ruralfinance.com.au
June 2009
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