Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 40.1110

Cost of split interests resulting from farm-in farm-out arrangements

                   Despite section 40- 205, if:

                     (a)  under a * farm-in farm-out arrangement, you provide a part of your interest in a * mining, quarrying or prospecting right; and

                     (b)  because of subsection 40-115(2), this Division applies as if you had split your interest into the part you stopped * holding and the rest of your interest;

then:

                     (c)  the first element of the * cost of the asset that consists of the part you stopped holding is a reasonable proportion of the amount you are taken to have paid under section 40-185 for any economic benefit involved in splitting your interest; and

                     (d)  the first element of the cost of the asset that consists of the rest of your interest is the sum of:

                              (i)  the * adjustable value of your interest just before it was split; and

                             (ii)  a reasonable proportion of the amount you are taken to have paid under section 40-185 for any economic benefit involved in splitting your interest.



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