Petroleum Resource Rent Tax Assessment Act 1987

SCHEDULE 1 - PROVISIONS RELATING TO INCURRING AND TRANSFER OF EXPLORATION EXPENDITURE ON OR AFTER 1 JULY 1990  

Sections 2 , 35A , 35B , 45A , 45B and 45D

PART 6 - RULES RELATING TO TRANSFER OF EXPLORATION EXPENDITURE BETWEEN GROUP COMPANIES  

31   RULE - CONTINUITY OF INTEREST WITHIN COMPANY GROUP  
Main rule

31(1)    
The loss company may transfer the expenditure to the profit company in relation to the receiving project and the transfer year only if:


(a) from the start of the financial year in which the expenditure was actually incurred, until the end of the transfer year - the company which held the receiving interest at any particular time was, at that time:


(i) a group company in relation to the company which held the loss interest at that time; or

(ii) unless the time is at the end of the transfer year - the company which held the loss interest at that time; and


(b) when the expenditure was actually incurred:


(i) unless section 41 applies to the expenditure - the company which actually incurred the expenditure held the loss interest in the transferring entity; or

(ii) if section 41 applies to the expenditure - the company taken under subparagraph 41(1)(a)(ii) to have made the payment of the expenditure held the loss interest in the transferring entity.


Receiving project or transferring entity not in existence at particular time

31(2)    
For the purposes of subclause (1):


(a) if the starting day for the receiving project was after the start of the financial year in which the expenditure was incurred - during the period from the start of that year until the start of the starting day, the company which held the receiving interest at the start of the starting day is taken to have held the receiving interest; and


(b) if the finishing day for the receiving project was before the end of the transfer year - during the period from the start of the finishing day until the end of the transfer year, the profit company is taken to have held the receiving interest; and


(c) if the starting day for the transferring entity was after the start of the financial year in which the expenditure was incurred - during the period from the start of that year until the start of the starting day, the company which held the loss interest at the start of the starting day is taken to have held the loss interest; and


(d) if the finishing day for the transferring entity was before the end of the transfer year - during the period from the start of the finishing day until the end of the transfer year, the loss company is taken to have held the loss interest.

31(2A)    
If:


(a) at a time (the cessation time ) after the expenditure was incurred and on or after 1 July 1993, the loss company ceased to hold any interest in relation to the transferring entity; and


(b) the cessation did not occur because of a transaction to which section 48 applies;

subclause (1) does not require the loss company to have held an interest in relation to the transferring entity at a time after the cessation time.



Starting day for receiving project in later financial year than when expenditure actually incurred

31(3)    
If the starting day for the receiving project was in a later financial year than the financial year in which the expenditure was incurred, the loss company may transfer the expenditure only if (in addition to the other requirements of this clause) the company which held the receiving interest at the start of the starting day was the company which had been granted the exploration permit by reference to which the starting day is determined.

Definitions

31(4)    
In this clause:

loss interest
means an interest held in the transferring entity by the loss company:


(a) at the end of the transfer year; or


(b) if the finishing day for the transferring entity was before the end of the transfer year - immediately before the start of the finishing day.

receiving interest
means an interest held in the receiving project by the profit company:


(a) at the end of the transfer year; or


(b) if the finishing day for the receiving project was before the end of the transfer year - immediately before the start of the finishing day.



 

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