Farm Management Deposit Offset
By Tui Silvester
Do you meet the eligibility criteria?
In the last month the majority of the major lenders are now offering the FMD's offset to their clients. This allows you to offset your FMD against business loans, to reduce the amount of interest payable. However there are eligiblity requirements you need to be aware of:
To be eligible:
- The FMD can only be offset against loans that are used 100% for business purposes. You may incur penalties if you apply your FMD to a mixed purpose loan, for example, lines of credit, loans that have been drawn down for private or other investment purposes. Note that your financial institution is under no obligation to check that your loan has been soley used for primary production purposes
- If the loan is in the name of a trust, company or non-FMD holder, it will not be eligible
More information can be accessed on the ATO Website, click here.
We strongly suggest that you contact us before entering into this type of arrangement so that it may be structured appropriately.