Information for New Applicants
The Farm Management Deposits scheme began in 1999, replacing the Australian Government's Income Equalisation Deposit and Farm Management Bond schemes.
To be eligible, you need to:
- be an individual primary producer with no more than $65,000 in off-farm taxable income when the farm management deposit is made
- make a farm management deposit of $1000 or more
- hold no more than $400,000 as farm management deposits at any time
- hold all farm management deposits with the same financial institution
- hold farm management deposits for at least 12 months to get the taxation benefits (farm management deposit holders in Exceptional Circumstances-declared areas may be exempt).
Primary producers include people in farming, fishing and forestry sectors.
A primary producer is an individual who:
- has a primary production business in Australia, but not as a trustee of a trust estate,
- is a partner (not a company) in a partnership that has a primary production business in Australia, or
- is a beneficiary (not a company) who is currently entitled to a share of the income of a trust estate where the trustee has a primary production business in Australia.
Please check with the Australian Tax Office if you are unsure of your status as a 'primary producer'.
Farm management deposits application forms
Financial institutions must provide you with a copy of the mandatory statement along with application forms, and should read the statement to you before you open an account.
Financial institutions should not accept applications without checking that you do not already have an FMD with another institution – otherwise the newly opened deposit will not be recognised. The financial institution could also be liable to you for any loss or damages.
Farm management deposit transfers between financial institutions
To transfer a farm management deposit from one financial institution to another, you must:
- choose a new authorised financial institution and inform it of your intention to transfer your existing farm management deposit holdings
- open a 'nil balance' account with the new institution – the financial institution must not accept any new farm management deposits until it receives your total deposit holdings, and credits your new account, and
- write to your existing financial institution requesting the transfer of your total farm management deposit holdings to your new institution, and provide details of your new account.
On receiving written advice, your existing financial institution must electronically transfer your entire farm management deposit holdings to your new account and pay separately any interest owing to you. The interest cannot be included in the principal being transferred.