MINERALS RESOURCE RENT TAX ACT 2012 [ REPEALED]

CHAPTER 4 - SPECIALIST LIABILITY RULES  

PART 4-1 - MINING PROJECT INTERESTS  

Division 125 - Splitting mining project interests  

Operative provisions  

SECTION 125-10   EFFECT OF MINING PROJECT SPLIT   Liability for MRRT moves with interest

125-10(1)  
Any MRRT that would otherwise be payable by a miner in relation to a mining project interest in relation to the part of an * MRRT year before a * mining project split happens (the pre-split part year ) is payable instead, in accordance with this Division:


(a) by each miner that has the mining project interest after the split; and


(b) in the MRRT year for each such miner in which the split happens.

Note 1:

The MRRT liability for each split interest is worked out in accordance with this Division. The sum total of those liabilities may be more, or less, than the liability the original miner would have had, depending on circumstances such as choices, offsets and available allowances.

Note 2:

For any period after the split that the new miner has the interest, its liability for MRRT (if any) is worked out under the ordinary rules.

Note 3:

The miner that has the interest after the split may have an additional amount of instalment income in the instalment quarter in which the split happens: see section 115-95 in Schedule 1 to the Taxation Administration Act 1953 .

Continuation of mining project interest

125-10(2)  
Each mining project interest (a new interest ) that a miner (a new miner ) has just after a * mining project split is taken to be a continuation of the mining project interest (the original interest ) a miner (the original miner ) had just before the split.

Note:

This means, for example, that:

  • (a) each split interest retains the history of when the mining project interest started, and of the entities who have held the interest at various times; and
  • (b) a choice made, under Division 85 , of the valuation approach for the mining project interest continues to have effect; and
  • (c) starting base assets that have been used to an extent in relation to the mining project interest before the transfer retain the history of that use.
  • Meaning of mining project split

    125-10(3)  
    A mining project split happens if:


    (a) an * arrangement comes into force that has the effect of transferring, from one miner to 2 or more other * entities , the whole of the entitlement comprising a mining project interest; or


    (b) an arrangement comes into force that has the effect of transferring, from one miner to one or more other entities, a part of the entitlement comprising a mining project interest; or


    (c) under an * Australian law , the * production right to which a mining project interest relates is split into 2 or more production rights; or


    (d) 2 or more constituent interests that are taken to be the same mining project interest because of Division 115 stop being * integrated .

    Note:

    A new miner may also be the original miner, in the situations described in paragraphs (b), (c) and (d).

    MRRT amounts move with interest

    125-10(4)  
    For the purposes of the application of the * MRRT law in the * MRRT year in which the split happens or a later MRRT year, each of the following amounts that, apart from this Division, would be an amount for the original miner and the original interest is instead, to the extent of a new interest ' s * split percentage , an amount for the new miner and the new interest:


    (a) an amount included in * mining revenue for the pre-split part year or an earlier MRRT year;


    (b) an amount included in * mining expenditure for the pre-split part year or an earlier MRRT year;


    (c) an amount of a * royalty credit arising for the original interest in the pre-split part year;


    (d) an amount of an * allowance component arising in an earlier MRRT year;


    (e) if the new miner is the same * entity as the original miner - the amount of the * pre-mining loss cap (if any) for the original interest.

    Note 1:

    If the new miner is not the same entity as the original miner, a new pre-mining loss cap arises for the new interest under section 95-30 .

    Note 2:

    If the original miner ' s MRRT year starts before a new miner ' s MRRT year, the effect of this provision is that amounts from before the start of the new miner ' s MRRT year are taken into account for the new miner in the new miner ' s MRRT year.

    Example:

    The original miner has a substituted accounting period of 12 months from 1 April to 31 March. The new miner has an MRRT year of 1 July to 30 June. The split happens on 1 July. The amounts covered by subsection (4) are all amounts that would be amounts for the original miner for the period from 1 April to 30 June, so these will, to the extent of the new interest ' s split percentage, be amounts for the new miner for the MRRT year 1 July to 30 June.

    Choices

    125-10(5)  
    Despite subsection (4) , in working out under that subsection an amount for the * MRRT year in which the split happens or a later MRRT year, a choice of the following kind made by the new miner is taken into account, but a choice of that kind made by the original miner is disregarded:


    (a) a choice under Division 175 to use the alternative valuation method in relation to the mining project interest for the * MRRT year in which the * mining project split happens;


    (b) a choice under Division 200 to use the simplified MRRT method for the MRRT year in which the split happens.

    Note:

    The effect of a simplified MRRT method choice made for a year before the split year is not affected: all allowance components are extinguished (see Division 200 ).

    Example:

    A mining project interest is split into 2 mining project interests held by 2 different new miners. The original miner had made a choice to use the alternative valuation method for the interest for the MRRT year in which the split happens. One of the new miners also chooses to use the alternative valuation method and one does not.

    The new miner that chooses to use the alternative valuation method works out the amounts to include in its mining revenue for the pre-split part year by working out the amount the original explorer would have included, then applying its split percentage.

    The other new miner works out the amount to include in its mining revenue for the pre-split part year by working out the amount the original miner would have included if no choices were made, then applying its split percentage.

    Suspension day

    125-10(6)  
    If there is a * suspension day for the mining project interest that was chosen under paragraph 130-10(1)(a):


    (a) the * mining project split does not affect:


    (i) any extinguishment under section 130-15 of * allowance components relating to the mining project interest; or

    (ii) any * rehabilitation tax offset amounts , for any earlier * MRRT years , relating to the mining project interest; and


    (b) that suspension day:


    (i) does not affect any further allowance components relating to a new interest and to that MRRT year or later MRRT years; but

    (ii) is no longer to be taken into account in determining whether there are any rehabilitation tax offset amounts, for that MRRT year or any later MRRT years, relating to a new interest.
    Note:

    The new miner may make a suspension day choice in the circumstances set out in Division 130 .

    Exception for new miner that is the same entity as original miner

    125-10(7)  
    If a new miner in relation to a * mining project split is the same * entity as the original miner:


    (a) a choice that would otherwise be disregarded under subsection (5) in working out an amount for that new miner is not disregarded; and


    (b) paragraph (6)(b) does not apply in relation to the new interest that that new miner has.

    Note:

    This subsection does not affect the operation of subsection (5) and paragraph (6)(b) for a new miner that is not the original miner.




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