Producers urged to deposit in ADIs

24 Mar, 2004 10:00 PM
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PRIMARY producers who have deposited money under the farm management deposits (FMD) scheme should be aware only authorised deposit-taking institutions (ADIs) and state or territory guaranteed entities are eligible to accept FMDs.

Those who made a farm management deposit with a non-complying entity must transfer the deposit to an eligible institution before July 1 to keep the tax benefit. For some longer term deposits, the deadline is July 1, 2007.

A non-complying deposit that is not transferred is deemed to be withdrawn immediately before the deadline and must be declared as income.

Most depositors are not affected - banks, building societies and credit unions are ADIs.

The Australian Prudential Regulation Authority website at www.apra.gov.au lists financial institution that are ADIs.

Primary producers in exceptional circumstances declared areas can, subject to obtaining an exceptional circumstances certificate, withdraw a farm management deposit within 12 months without losing the tax benefit. This concession does not apply if the deposit was made when the area was already under the exceptional circumstances declaration.

The FMD scheme helps producers manage income fluctuations.

Those who meet certain conditions can claim a FMD as a tax deduction and declare it as income when it is withdrawn.

Deposits withdrawn in 12 months do not generally qualify for the deduction.

For more information, visit the Australian Taxation's website at www.ato.gov.au/farmmanagementdepo sits or call the office on 13 28 66.

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