Tax Planning

Evaluate of the agricultural deposit system to see whether it is resilient or a tax planning device

The federal government’s Farm Management Deposits Scheme is under scrutiny and a sixth review in 15 years is announced.

First introduced in 1999, the system allows farmers to set aside up to $ 800,000 in pre-tax income to fall back on during low-income years such as drought.

MKS account balances have grown steadily over the past decade and totaled $ 5.3 billion as of January this year.

The Department of Agriculture, Water and Environment will oversee the review and see if it will help farmers be more financially independent or if it will be used for other purposes such as tax planning.

Federal Agriculture Minister David Littleproud said the review would ensure that the system was “a useful tool for farmers”.

“The FMDS helps farmers deal with the fluctuating income streams that come with climatic fluctuations and changing market conditions,” he said.

“The aim is to help farmers develop financial independence, manage risks and prepare for difficult times.

“Farmers can have a say in how well the FMDS works and how it should work in the future.

“The assessment provides an opportunity to determine which areas need improvement.”

The evaluation report will be submitted to the government for review in the middle of the year.

For more information or to have a say, visit: haveyoursay.awe.gov.au/farm-management-deposit-scheme-evaluation

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