The farm management deposits (FMD) scheme commenced on 2 January 1999, and replaced the income equalisation deposits scheme. The scheme’s legislation provisions are in Schedule 2G of the Income Tax Assessment Act 1936.
Farm management deposits provide an important risk management tool to help farmers deal with uneven income, common in agriculture because of climate and market changes. They complement other risk management strategies available to primary producers such as developing fodder and water reserves, financial planning and diversifying their production systems.
This scheme allows you to claim a deduction for farm management deposits made in the year you deposit. If you withdraw a farm management deposit, the amount of the deduction previously allowed is included in your assessable income in the withdrawal tax year.
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