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INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 15 - Prospecting and mining rights  

SECTION 160ZZF  ROLL-OVER OF PROSPECTING RIGHTS AND MINING RIGHTS  

160ZZF(1)  [Definitions]  


In this section-

"mining asset" means:


(a) a mining right; or


(b) a prospecting right;

"mining right" means:


(a) an authority, licence, permit or right under a law of the Commonwealth, of a State, of a Territory or of a foreign country to mine minerals in a particular area; or


(b) a lease of land under such a law by virtue of which the lessee is entitled to mine minerals on the land,

and includes an interest in such an authority, licence, permit, right or lease;

"prospecting right" means-


(a) an authority, licence, permit or right under a law of the Commonwealth, of a State, of a Territory or of a foreign country to prospect or explore for minerals in a particular area; or


(b) a lease of land under such a law by virtue of which the lessee is entitled to prospect or explore for minerals on the land,

and includes an interest in such an authority, licence, permit, right or lease.

160ZZF(2)  [Application of section]  


This section applies where:


(a) at a particular time, one or more mining assets (in this section called the ``original mining assets'') owned by a taxpayer expire or are surrendered;


(b) one or more fresh mining assets (in this section called the ``new mining assets'') is or are granted to the taxpayer by way of any one or more of the following:


(i) the renewal of the original mining assets, where the renewal is (whether by law, custom or otherwise) wholly or principally attributable to the taxpayer's prior ownership of the original mining assets;

(ii) the extension of the term of the original mining assets, where the extension is (whether by law, custom or otherwise) wholly or principally attributable to the taxpayer's prior ownership of the original mining assets;

(iii) the consolidation, or the consolidation and division, of the original mining assets;

(iv) the subdivision of the original mining assets;

(v) in a case where the original mining assets are mining rights - the conversion of those mining rights to prospecting rights;

(vi) in a case where the original mining assets are prospecting rights - the conversion of those prospecting rights to mining rights;

(vii) excising or relinquishing a part (which part is in this section called the ``excised area'') of the area to which the original mining assets related;

(viii) expanding the area of land to which the original mining assets related; and


(c) in the case of a taxpayer in the capacity of a trustee of a trust estate - immediately after the grant of the new mining assets, the taxpayer holds the new mining assets upon the same trust as the taxpayer held the original mining assets.

160ZZF(3)  [Application of Pt IIIA to original mining assets]  


Subject to subsection (5), this Part (other than this section) does not apply in respect of the expiry or surrender of any of the original mining assets.

160ZZF(4)  [Pre- and post-20/9/85 original mining assets]  


For the purposes of this section:


(a) an original mining asset acquired by the taxpayer before 20 September 1985 shall be taken to be a pre-20 September 1985 original mining asset; and


(b) any other original mining asset shall be taken to be a post-20 September 1985 original mining asset.

160ZZF(5)  [Post-20/9/85 original mining asset relating to excised area]  


Subject to this Part, if the taxpayer received, or was entitled to receive, any consideration in respect of the expiry or surrender of a post-20 September 1985 original mining asset that related, in whole or in part, to the excised area:


(a) if the original mining asset related wholly to the excised area - this Part applies in respect of the disposal of that mining asset; and


(b) if the original mining asset related only in part to the excised area - the taxpayer shall be taken, for the purposes of this Part, to have disposed of that part of that mining asset that is attributable to the excised area.

160ZZF(6)  [New mining asset wholly related to pre-20/9/85 original mining asset land]  


If a particular new mining asset relates wholly to land to which a pre-20 September 1985 original mining asset related - the taxpayer shall be taken, for the purposes of this Part, to have acquired the new mining asset before 20 September 1985.

160ZZF(7)  [New mining asset wholly related to post-20/9/85 original mining asset land]  


If a particular new mining asset relates wholly to land to which a post-20 September 1985 original mining asset related - the new mining asset shall be taken, for the purposes of this section, to be a post-20 September 1985 new mining asset.

160ZZF(8)  [New mining assets partly related to 2 or more different lands]  


If a particular new mining asset relates partly to any 2 or more of the following:


(a) land to which a pre-20 September 1985 original mining asset related;


(b) land to which a post-20 September 1985 original mining asset related;


(c) other land;

the following provisions have effect:


(d) the new mining asset shall be taken, for the purposes of this Part, to comprise 2 or 3 separate mining assets, as follows:


(i) the new mining asset to the extent to which it relates to land to which a pre-20 September 1985 original mining asset related;

(ii) the new mining asset to the extent to which it relates to land to which a post-20 September 1985 original mining asset related;

(iii) the new mining asset to the extent to which it relates to other land;


(e) the taxpayer shall be treated, for the purposes of this Part, as if the taxpayer had acquired the mining asset referred to in subparagraph (d)(i) before 20 September 1985;


(f) the mining asset referred to in subparagraph (d)(ii) shall be taken, for the purposes of this section, to be a post-20 September 1985 new mining asset;


(g) on the disposal of the actual new mining asset, the consideration in respect of the disposal of the actual mining asset shall be apportioned between the separate assets.

160ZZF(9)  [Determination of amount taken to have been paid for post-20/9/85 new mining asset]  


The taxpayer shall be taken to have paid or given as consideration in respect of the acquisition of a post-20 September 1985 new mining asset:


(a) for the purposes of ascertaining whether a capital gain accrued to the taxpayer in the event of a subsequent disposal of the new mining asset by the taxpayer - the amount calculated in accordance with the formula:
ICB of post CGT orig. assets×            MV of new asset          
 MV of post CGT new assets


where:

ICB of post CGT orig. assets is the sum of the amounts that would have been the indexed cost bases to the taxpayer of post-20 September 1985 original mining assets for the purposes of this Part if this Part had applied in respect of the expiry or surrender of the original mining assets reduced, in a case where subsection (5) applies in relation to any of the post-20 September 1985 original mining assets, by so much of those indexed cost bases as is attributable to the excised area concerned;
MV of new asset is the number of dollars in the market value of the new mining asset immediately after the acquisition of the asset by the taxpayer; and
MV of post CGT new assets is the number of dollars in the market value of the post-20 September 1985 new mining assets immediately after the acquisition of the assets by the taxpayer; or


(b) for the purposes of ascertaining whether the taxpayer incurred a capital loss in the event of a subsequent disposal of the new mining asset by the taxpayer - the amount calculated in accordance with the formula:
RCB of post CGT orig. assets×            MV of land asset          
 MV of post CGT new assets


where:

RCB of post CGT orig. assets is the sum of the amounts that would have been the reduced cost bases to the taxpayer of post-20 September 1985 original mining assets for the purposes of this Part if this Part had applied in respect of the expiry or surrender of the original mining assets reduced, in a case where subsection (5) applies in relation to any of the post-20 September 1985 original mining assets, by so much of those reduced cost bases as is attributable to the excised area concerned;
MV of new asset is the number of dollars in the market value of the new mining asset immediately after the acquisition of the asset by the taxpayer; and
MV of post CGT new assets is the number of dollars in the market value of the post-20 September 1985 new mining assets immediately after the acquisition of the assets by the taxpayer.

160ZZF(10)  [Disposal of post-20/9/85 new mining asset]  


If a post-20 September 1985 new mining asset is disposed of by the taxpayer within 12 months after the earliest day, being a day after 19 September 1985, on which any post-20 September 1985 original mining asset was acquired by the taxpayer, the reference in paragraph (9)(a) to the indexed cost bases to the taxpayer of post-20 September 1985 original mining assets is a reference to the cost bases to the taxpayer of the post-20 September 1985 original mining assets.

160ZZF(11)  [Commissioner's discretion where original area differs from new area]  


Where:


(a) the area of land (in this subsection called the ``original area'') to which the original mining assets related differs from the area of land (in this subsection called the ``new area'') to which the new mining assets relate; and


(b) having regard to all relevant circumstances, including:


(i) the difference between the size of the original area and the size of the new area;

(ii) the difference between:

(A) the market value of the new mining assets immediately after the grant of the new mining assets to the taxpayer; and

(B) the amount that would have been the market value of the new mining assets, immediately after the grant of the new mining assets to the taxpayer, if the new mining assets had been granted in respect of the original area instead of the new area; and

(iii) whether the new mining assets were granted for the purpose of correcting errors or omissions;
the Commissioner is satisfied that it would be unreasonable not to apply this subsection;

the Commissioner may, for the purposes of subsections (6) to (8) (inclusive), to such extent as the Commissioner considers reasonable, treat a new mining asset as relating, in whole or in part, to land to which a particular original mining asset related.


 



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