## 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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