Transactions involving mining tenements are liable for transfer duty when transferred directly and may be liable for landholder duty when transferred indirectly (for example, shares are transferred in a company that owns mining tenements).
See Commissioner's Practice DA 42 'Certain Transactions Involving Mining Tenements'.
Transactions involving specific mineral rights over a mining tenement are liable for transfer duty when they are created, transferred or surrendered (unless the surrender is for no consideration). They may also be liable for landholder duty when transferred indirectly.
See the derivative mining rights fact sheet for more information.
Valuations
Show moreTransactions involving mining tenements will require valuation in certain circumstances, for example where:
- the parties are not at arm’s length
- the consideration includes a royalty or
- there is an allocation to mining information or mining goodwill.
In some cases we will request that the Valuer General provide a valuation of mining tenements. For more complex transactions, we will usually require the taxpayer to provide a written valuation of the mining tenements. See information about valuing land for duties purposes.
If you are required to provide a written valuation and you fail to do so, we may apply penalty tax to recover from you the costs of obtaining our own valuation.
In certain circumstances the Commissioner may consider making an interim assessment or a compromise assessment of the amount of duty to be paid. A complete assessment will be made following an interim assessment.
Farm-in agreements
Show moreA farm-in agreement is a transaction under which:
- a person (the farmee) can acquire an interest in a mining tenement or derivative mining right after spending on exploration of the tenement and
- the exploration amount or target is specified in the agreement and
- the farmee’s interest will be held together with the owner of the mining tenement.
If there is no consideration for the farm-in agreement other than the exploration requirement, the agreement will be assessed for nominal duty.
If there is consideration for the farm-in agreement other than the exploration requirement duty will be assessed at the general rate on the amount of that consideration.
Consideration includes the farmee reimbursing the owner for past exploration and development costs.
Once the farmee has spent the agreed exploration amount and earned the interest in the tenement, the transfer of the interest in the tenement will be assessed for no double duty.
See:
- 'Farm-in Agreements' fact sheet
- Commissioner's Practice DA 54 'Farm-in Agreements'
- Revenue Ruling DA 16 'Exploration for Farm-in Transactions'
- Circular 19 'Farm-in Concession'.
Lodgment and payment
Show moreWhen to lodge
For transactions involving mining tenements, including specific mineral rights and farm-in agreements, lodge within two months after the transaction. Include the information set out in the duties information requirements.
For the acquisition of an interest in a corporation or unit trust scheme that is a landholder, advise us within two months after the acquisition. Include the information set out in the duties information requirements.
- Use the Notice of failure to grant or surrender derivative mining rights form to notify the Commissioner if you do not grant or surrender derivative mining rights within specified timeframes.
- Use the Request for longer period to grant derivative mining rights form to apply for a longer period for the derivative mining right to be granted.
When to pay
For an agreement or transfer that requires a transfer form to be lodged with the Department of Mines, Industry Regulation and Safety, pay duty within 12 months after the transaction.
For all other transactions, pay duty within one month after the assessment notice is issued.
