INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS  

Division 418 - Exploration for minerals  

Subdivision 418-E - Issuing exploration credits  

SECTION 418-115   Who may receive an exploration credit and what is the pool from which the credit may be issued  

418-115(1)  
If *exploration credits are to be issued by an entity (the minerals explorer ) for an income year (the credit year ), work out each of the following by identifying whether scenario 1, 2 or 3 applies, and applying the rules for that scenario:


(a) whether the minerals explorer can issue an exploration credit to another entity in relation to *exploration investment made by the other entity in the minerals explorer in the credit year;


(b) whether the minerals explorer can issue an exploration credit to another entity in relation to exploration investment made by the other entity in the minerals explorer in the income year immediately preceding the credit year (the preceding year );


(c) the pool of exploration credits from which an exploration credit may be issued to another entity in relation to exploration investment made by the other entity in the minerals explorer in the credit year (this is called the issue pool for exploration investment made in the minerals explorer in the credit year);


(d) the pool of exploration credits from which an exploration credit may be issued to another entity in relation to exploration investment made by the other entity in the minerals explorer in the preceding year (this is called the issue pool for exploration investment made in the minerals explorer in the preceding year). Scenario 1 - no unused allocation of exploration credits from the preceding year

418-115(2)  
If there is no *unused allocation of exploration credits from the preceding year:


(a) *exploration credits can be issued to another entity in relation to *exploration investment made by the other entity in the minerals explorer in the credit year; and


(b) no exploration credits can be issued to another entity in relation to exploration investment made by the other entity in the minerals explorer in the preceding year.

418-115(3)  
In this scenario:


(a) the issue pool for *exploration investment made in the minerals explorer in the credit year is equal to the total amount of *exploration credits created by the minerals explorer for the credit year; and


(b) the issue pool for exploration investment made in the minerals explorer in the preceding year is nil. Scenario 2 - exploration credits for the credit year exceed unused allocation of exploration credits from the preceding year

418-115(4)  
If the amount of the *exploration credits created by the minerals explorer for the credit year is more than the *unused allocation of exploration credits from the preceding year:


(a) exploration credits can be issued to another entity in relation to *exploration investment made by the other entity in the minerals explorer in the credit year; and


(b) exploration credits can be issued to another entity in relation to exploration investment made by the other entity in the minerals explorer in the preceding year.

418-115(5)  
In this scenario:


(a) the issue pool for *exploration investment made in the minerals explorer in the credit year is equal to the difference between the *unused allocation of exploration credits from the preceding year and the total amount of *exploration credits created by the minerals explorer for the credit year; and


(b) the issue pool for exploration investment made in the minerals explorer in the preceding year is equal to the unused allocation of exploration credits from the preceding year.

418-115(6)  
However, no *exploration credit can be issued to another entity in relation to *exploration investment made by the entity in the minerals explorer in the credit year unless the *issue pool for exploration investment in the preceding year is exhausted. Scenario 3 - exploration credits for the credit year are equal to or less than the unused allocation of exploration credits from the preceding year

418-115(7)  
If the amount of the *exploration credits created by the minerals explorer for the credit year is equal to or less than the *unused allocation of exploration credits from the preceding year:


(a) no exploration credits can be issued to another entity in relation to *exploration investment made by the entity in the minerals explorer in the credit year; and


(b) exploration credits can be issued to another entity in relation to exploration investment made by the other entity in the minerals explorer in the preceding year.

418-115(8)  
In this scenario:


(a) the issue pool for *exploration investment made in the minerals explorer in the credit year is nil; and


(b) the issue pool for exploration investment made in the minerals explorer in the preceding year is equal to the total amount of *exploration credits created by the minerals explorer for the credit year.


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