The Government has released for public consultation an exposure draft of amendments to be made to the farm management deposits (FMD) scheme, and the accompanying explanatory material.
The exposure draft legislation gives effect to the Government’s decision announced on 6 November 2013 to:
- increase the off-farm income threshold from $65,000 to $100,000, allowing primary producers to earn more income from non-primary production sources in an income year before being prevented from making new FMDs; and
- facilitate the consolidation of FMDs, by eliminating the tax consequences of withdrawing and immediately redepositing FMDs.
These changes would take effect from 1 July 2014.
The exposure draft legislation also amends the Banking Act 1959 to exclude FMDs from the operation of the unclaimed moneys scheme from the date of Royal Assent, recognising the fact that FMDs are inherently long-term and dormant in nature.
These amendments are designed to improve the operation of the FMD scheme.