Who can claim
This deduction is available to individuals.
- You are an individual carrying on a primary production business in Australia when the deposit is made.
- The deposit is held under a qualifying agreement for one individual owner with an eligible FMD provider and is made by 30 June of the income year.
- The deductible amount does not exceed taxable primary-production income for the year.
- The deposit is at least $1,000 and total FMD balances across all providers do not exceed $800,000.
What you cannot claim
- No deduction is available where taxable non-primary-production income exceeds $100,000 for the income year.
- A company or partnership cannot own an FMD or claim this deduction, although an eligible individual partner or beneficiary may qualify.
- A deposit repaid within 12 months generally loses concessional treatment unless a natural-disaster or severe-drought exception applies. Transfers between providers and qualifying reinvestments have separate timing rules.
- Bankruptcy, death or ceasing primary production without recommencing within the statutory period can deny the deduction.
How the amount is worked out
The deduction is the eligible deposit made in the income year, limited to taxable primary-production income and the scheme limits. Previously deducted amounts repaid are assessable income, subject to the transfer, reinvestment, disaster and drought rules.
Records the ATO expects
- FMD provider statement
- Deposit and repayment dates
- Primary and non-primary production income
- All-provider FMD balance
Where this rule comes from
Primary source: Income Tax Assessment Act 1997 Division 393 (Compilation 266 in force 1 July 2026). Reviewed 30 July 2026. Covers the 2025-26 and 2026-27 income years.