(a)   you are an individual carrying on a primary production business (including a primary production business you carry on as a partner in a partnership or as a beneficiary of a trust); and

  (b)   you hold the deposit for at least 12 months; and

  (c)   you meet some other tests.

The amount of the deposit withdrawn is included in your assessable income in the income year in which it is repaid. Special rules apply if the deposit is repaid in the event of a severe drought or an applicable natural disaster.

Farm management deposits allow you to carry over income from years of good cash flow and to draw down on that income in years when you need the cash. This enables you to defer the income tax on your taxable primary production income from the income year in which you make the deposit until the income year in which the deposit is repaid.

  Note:   An FMD provider must, every calendar month, give certain information to the Agriculture Secretary about farm management deposits: see section   398 - 5 in Schedule   1 to the Taxation Administration Act 1953 .