MINERALS RESOURCE RENT TAX ACT 2012 (REPEALED)

CHAPTER 4 - SPECIALIST LIABILITY RULES  

PART 4-3 - ADJUSTING MRRT LIABILITIES  

Division 165 - Starting base adjustments  

Subdivision 165-C - Partial disposal of starting base assets  

SECTION 165-40   DECLINES IN VALUE OF RETAINED PARTS OF STARTING BASE ASSETS  

165-40(1)    
The decline in value of a * starting base asset during an * MRRT year (an entire MRRT year ) in which section 165-35 applies in relation to a miner ceasing to * hold a part of the starting base asset is worked out by:

(a) working out under section 90-5 the decline in value of the asset, as if the part of the MRRT year before the cessation were an MRRT year; and

(b) working out under section 90-5 the decline in value of the asset, as if the part of the MRRT year after the cessation were another MRRT year; and

(c) summing the result.

Example:

Using the example in subsection 165-35(2) , the decline in value of the truck during the MRRT year is $ 625,000, being the sum of:

(a) for the half of the MRRT year that precedes the cessation, a decline in value of $ 500,000 ( $ 10 million × 1/2 × 1/10 ); and

(b) for the remainder of the MRRT year, a decline in value of $ 125,000 (( $ 9.5 million − $ 7.125 million) × 1/2 × 1/9.5 ).

165-40(2)    
In working out, under paragraph (1)(b), the decline in value of a * starting base asset after a cessation, the * base value of the starting base asset:

(a) is worked out:

(i) as if the part of the * MRRT year that is taken by paragraph (1)(a) to be an MRRT year were the preceding MRRT year; and

(ii) if the base value is worked out under section 90-30 - as if the uplift factor mentioned in that section were 1; and

(b) is reduced by the * adjustable value of the disposed asset for that cessation.

165-40(3)    
If:

(a) section 165-35 applies in relation to a miner ceasing to * hold a part of a * starting base asset ; and

(b) that cessation happens during a part of an * MRRT year that, because of a previous application of this section (including an application affected by this subsection) in relation to the same starting base asset, is taken by paragraph (1)(b) to be an MRRT year;

in working out, under paragraph (1)(b), the decline in value of the starting base asset during that part of an MRRT year, apply subsection (1) to that part of the MRRT year as if it were an entire MRRT year.

Example:

Extending the example in subsection (1), the miner sells half of its remaining interest in the truck halfway through the second half of the MRRT year. At the time of this sale, the adjustable value of the miner ' s 25 % interest in the truck is $ 2,312,500, so the adjustable value of the disposed asset on this occasion is $ 1,156,250 (50 % of $ 2,312,500).

The decline in value of the miner ' s interest in the truck during the second half of the MRRT year is $ 93,750, being the sum of:

(a) for the first 3 months of the second half of the MRRT year, a decline in value of $ 62,500 ( $ 2.375 million × 1/4 × 1/9.5 ); and

(b) for the remainder of the second half of the MRRT year, a decline in value of $ 31,250 ( $ 1,156,250 × 1/4 × 1/9.25 ).

165-40(4)    
If:

(a) under Division 85 , the book value approach is the valuation approach for the mining project interest to which a * starting base asset relates ; and

(b) the decline in value of the starting base asset during a part of an * MRRT year is to be worked out under this section;

the write off rate of the starting base asset under section 90-10 for that part of the MRRT year is taken to be the write off rate of the starting base asset under that section for the entire MRRT year.