The Government has released exposure draft legislation and explanatory material to implement changes to the Farm Management Deposits (FMD) scheme.
The existing FMD Scheme allows farmers to set aside funds in good years to provide for low income years, and only pay tax when the funds are withdrawn.
The changes include:
- a doubling of the deposit limit for FMDs from $400,000 to $800,000;
- the removal of legislative restrictions placed on financial institutions preventing FMD accounts being used as a farm business loan offset; and
- introducing early access provisions for farmers in severe drought.
