Changes announced for farm management accounts
Primary producers affected by natural disasters will be able to draw on their farm management accounts within 12 months of making deposits without losing tax concessions, under the terms of a draft amendment to the Farm Management Deposit scheme released by the Government yesterday.
The Farm Management Deposit, which was started in 1999, provides an incentive in the form of a tax concession to primary producers to save money earned in the good years and draw it down in years when farm income falls.
Tax payable on primary production income is deferred if the income is deposited in a farm management account. Tax is payable when a withdrawal is made (and it is assumed the tax rate will be lower if the withdrawal is made in a bad year).
Other changes proposed in the draft amendment include a provision to allow primary producers to hold farm management accounts with different financial institutions.
Source: Banking Day