Farm Management Deposit Accounts

Dated: September 2004

The ATO has issued an Interpretative Decision (2004/480) for authorised deposit taking institutions who handle farm management deposits (FMDs). When merging multiple FMDs into a single deposit with the same financial institution, tax legislation treats them as a repayment of the FMD as it has been otherwise dealt with on behalf of or at the request of the depositor.

Therefore it becomes critical that clients who are primary producers with FMDs are aware that the merging of multiple FMDs into a single account will have taxation implications.