Farm Management Deposits
The Farm Managed Deposit (FMD) Scheme assists primary producers to deal more effectively with fluctuations in cash flows.
The scheme allows eligible primary producers to set aside pre-tax income from primary production in years of high income, which they can draw on in years of low income.
Income deposited into an FMD account is tax deductible in the financial year the deposit is made. It becomes taxable income in the financial year in which it is withdrawn.
The following three changes to the Farm Management Deposits (FMD) Scheme, are commencing on 1 July 2016:
- doubling of the cap on deposits from $400 000 to $800 000
- re-establishment of an early access trigger during times of drought
- allowing FMDs to be used to offset the interest costs on primary production business debt.
For more information about FMD’s visit the Australian Government Department of Agriculture and Water Resources website.
For more information about the changes to FMD’s on 1 July 2016 please visit Australian Government Department of Agriculture and Water Resources page Important Changes to the Farm Management Deposits Scheme or discuss with your Rural Financial Counsellor.