Improvements to the Farm Management Deposits (FMD) scheme take effect from July 1, giving farmers more flexibility in managing their finances, especially during periods of hardship, such as drought.
The changes strengthen the FMD scheme, managed by the Department of Agriculture and Water Resources, the Treasury and the Australian Taxation Office.
The scheme aims to assist farmers to better manage fluctuations in cash-flow and provides a way for farmers to set aside pre-tax income during good years, which they can later draw on to help them manage through lean years.
From today, a range of improvements to FMDs take effect, making them an even more effective tool for farmers in managing their businesses.
Early access provisions have been re-established for farmers affected by drought, who will now be able to withdraw their FMDs early without losing the tax concessions they have claimed.
Farmers considering this option can use the online tool on the Bureau of Meteorology website to help them assess their eligibility.
Farmers will now be able to set aside twice as much in their FMDs, with the deposit limit doubling from $400,000 to $800,000.
