INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 4 - Leases  

SECTION 88B   MINING LEASES  

88B(1)   [Grant]  

Where a mining lease is granted, or a lease of land other than a mining lease is granted for mining purposes -


(a) sections 84 and 86 , and subsection 88(1) , shall not apply in relation to a premium received or paid for or in connexion with the grant of the lease;


(b) section 85 shall not apply -


(i) in relation to the disposal by the lessor to the lessee of goodwill or a licence in respect of a business carried on upon the leased land; or

(ii) in relation to an assignment or surrender of the lease by the lessee or the disposal by the lessee of goodwill or a licence in respect of a business carried on upon the leased land;


(c) section 87 , and subsection 88(2) , shall not apply in relation to improvements made upon the leased land by the lessee wholly or partly for the purpose of mining operations carried on by him upon the land; and


(d) if the lease is a sub-lease for or in connexion with which a premium is payable - section 85A shall not apply in relation to the sub-lease and the amount, if any, which, but for this paragraph, would, in a year of income during the whole or a part of which the sub-lease is in force, be allowed under section 88 as a deduction from the assessable income of the person who granted the sub-lease shall be reduced by an amount which bears to that first-mentioned amount the same proportion as the number of days during which the sub-lease is in force in that year bears to the number of days in that year.

88B(2)   [Assignment of lease]  

Where a mining lease is assigned, or a lease of land other than a mining lease is assigned for mining purposes -


(a) sections 84 and 86 , and subsection 88(1) , shall not apply in relation to a premium received or paid for or in connexion with the assignment of the lease;


(b) section 85 shall not apply -


(i) in relation to the assignment of the lease by the assignor or the disposal by the assignor to the assignee of goodwill or a licence in respect of a business carried on upon the leased land; or

(ii) in relation to an assignment or surrender of the lease by the assignee or the disposal by the assignee of goodwill or a licence in respect of a business carried on upon the leased land; and


(c) section 87 , and subsection 88(2) , shall not apply in relation to improvements made upon the leased land by the assignee wholly or partly for the purpose of mining operations carried on by him upon the land.

88B(3)   [Surrender of lease]  

Where a mining lease is surrendered, or a lease of land other than a mining lease is surrendered for mining purposes -


(a) sections 84 and 86 , and subsection 88(1) , shall not apply in relation to a premium received or paid for or in connexion with the surrender of the lease; and


(b) section 85 shall not apply in relation to the surrender of the lease or the disposal by the person who surrenders the lease, to the person to whom the surrender is made, of goodwill or a licence in respect of a business carried on upon the leased land.

88B(4)   [Statement of purpose of grant, etc]  

For the purpose of this section, a lease shall be deemed not to have been granted, assigned or surrendered for mining purposes unless there appears, in a document signed by the parties before or at the time the grant, assignment or surrender was made, or before such later time as the Commissioner determines, a statement to the effect that the purpose of the grant, assignment or surrender is to enable the person to whom the grant, assignment or surrender is made to carry on mining operations upon the land.

88B(5)   [Election that section not apply]  

The parties to the grant, assignment or surrender of a lease may, by notice in writing signed by the parties and lodged with the Commissioner on or before 31 August next succeeding the end of the financial year in which the lease was granted, assigned or surrendered or on or before such later date as the Commissioner determines, elect that this section shall not apply in relation to the grant, assignment or surrender and, subject to subsections (5A), (5B), (5C) and (5D), where such an election is made, this Division applies in relation to the grant, assignment or surrender as if this section and section 83AA had not been enacted.

88B(5A)   [Lease qualifying for election]  

An election under subsection (5) shall not be made in relation to a lease other than a lease granted on or before, or in pursuance of an agreement entered into on or before, 9 May 1968.

88B(5B)   [Election re assignment or surrender of lease after 9 May 1968]  

Except for the purposes of the application of section 85 , an election under subsection (5) in relation to the assignment or surrender of a lease does not have effect unless the assignment or surrender -


(a) took effect on or before 9 May 1968; or


(b) takes effect after that date in pursuance of an agreement entered into on or before that date.

88B(5C)   [Election re assignment or surrender of lease after 9 May 1968 - s 85]  

An election under subsection (5) in relation to the assignment or surrender of a lease, being an assignment or surrender that took effect after 9 May 1968 does not have effect for the purpose of the application of section 85 unless the assignment or surrender is made by a person who acquired the lease on or before that date or in pursuance of an agreement entered into on or before that date or by a person who succeeded to the lease upon the death of such a person, and such an election does not have effect for the purpose of the application of section 85 :


(a) in relation to an amount referred to in subsection 85(1) that was paid in effecting improvements other than improvements referred to in subsection 88(2) , unless the assignment or surrender was made in pursuance of an agreement entered into on or before that date; or


(b) in relation to an amount referred to in subsection 85(1) that was paid for the purpose referred to in paragraph (c) of that subsection, unless the amount was paid on or before that date or in pursuance of an agreement entered into on or before that date.

88B(5D)   [Election for improvements made after 9 May 1968]  

An election under subsection (5) does not have effect for the purposes of the application of section 85 , 87 or 88 in relation to improvements made after 9 May 1968 on land the subject of a lease with the written consent of the lessor of that land unless:


(a) the written consent was given on or before that date; or


(b) the Commissioner is satisfied that, on or before that date, the lessor had agreed, whether absolutely or subject to conditions, to give that consent and the written consent was given within a period after that date which the Commissioner, on the joint application in writing of the lessor and the lessee made not later than 60 days from that date or within such further time as the Commissioner allows, has approved (whether before or after the giving of the consent) as reasonable for the purposes of this subsection.

88B(6)   [Commonwealth or State party to grant, etc]  

Where the Commonwealth or a State, or a person or authority acting for or on behalf of the Commonwealth or a State, is a party to the grant, assignment or surrender of a lease, an election made by the other party or parties to the grant, assignment or surrender has effect for the purposes of subsection (5) as if it were made by all the parties.

88B(7)   [Definitions]  

In this section:

land
means land in Australia or Papua New Guinea.

mining lease
means a lease of land granted under a law of a State or Territory relating to mining.

mining operations
includes prospecting for a metal or mineral.


View surrounding sectionsView surrounding sectionsBack to top


This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.