Subdivision 124-J—Crown leases

Guide to Subdivision 124-J

124-570 What this Subdivision is about

This Subdivision sets out the situations in which the holder of a Crown lease over land obtains a replacement asset roll-over when the lease is, among other things, renewed, extended or converted to an estate in fee simple.

Table of sections

Operative provisions

124-575 Extension or renewal of Crown lease

124-580 Meaning of Crown lease

124-585 Original right differs in area from new right

124-590 Part of original right excised

124-595 Treating parts of new right as separate assets

124-600 What is the roll-over?

124-605 Change of lessor

[This is the end of the Guide.]

Operative provisions

124-575 Extension or renewal of Crown lease

(1) There is a roll-over if:

(a) you hold one or more *CGT assets that are *Crown leases over land (the original right); and

(b) the original right expires or you surrender it; and

(c) you are granted one or more new Crown leases over land or one or more estates in fee simple in land, or both (the new right); and

(d) the new right relates to the same land as the original right.

Note 1: The roll-over consequences are set out in Subdivision 124-A. They might be modified: see section 124-600.

Note 2: If there has been a capital improvement to the Crown lease: see section 108-75.

(2) The new right must have been granted in one of these ways:

(a) by renewing or extending the term of the original right where the renewal or extension is mainly due to your having held the original right; or

(b) by changing the purpose for which the land to which the original right related can be used; or

(c) by converting the original right to a *Crown lease in perpetuity; or

(d) by converting the original right to an estate in fee simple; or

(e) by consolidating, or consolidating and dividing, the original right; or

(f) by subdividing the original right; or

(g) by excising or relinquishing a part of the land to which the original right related; or

(h) by expanding the area of that land.

124-580 Meaning of Crown lease

A Crown lease is:

(a) a lease of land granted by the Crown under an *Australian law (other than the common law); or

(b) a similar lease granted under a *foreign law.

124-585 Original right differs in area from new right

(1) Even if the new right relates to different land to that to which the original right related, this Subdivision applies as if it relates to the same land in these cases:

(a) the difference in area is not significant;

(b) the difference in market value is not significant;

(c) the new right was granted to correct errors in or omissions from the original right;

(d) the new right relates to a significantly different area of land but you had made reasonable efforts to ensure that the area was the same;

(e) it is otherwise reasonable for this Subdivision to apply in that way.

(2) However, the rule in subsection (1) does not apply if section 124-590 applies.

124-590 Part of original right excised

(1) There is a partial roll-over if you *acquired the original right on or after 20 September 1985 and:

(a) the land to which the new right relates is different in area to the land the subject of the original right because a part (the excised part) of the land to which the original right related was excised or you relinquished it; and

(b) you received a payment for the expiry or surrender of the original right.

The payment can include giving property: see section 103-5.

Note: Section 124-600 sets out the effect on your cost base.

(2) There is no roll-over for the excised part. The *cost base of the excised part is so much of the *cost base of the relevant *Crown lease as is attributable to the excised part.

Its *reduced cost base is worked out similarly.

Note: You may make a capital gain or loss on the excised part because of CGT event C2.

124-595 Treating parts of new right as separate assets

(1) Each part of a *Crown lease or an estate in fee simple that is part of the new right is taken to be a separate *CGT asset to the extent that it relates to:

(a) land to which a Crown lease (that was part of the original right) related where you *acquired the lease before 20 September 1985; and

(b) land to which a Crown lease (that was part of the original right) related where you acquired the lease on or after 20 September 1985; and

(c) other land.

(2) You are taken to have *acquired each asset that is a separate *CGT asset because of paragraph (1)(a) before 20 September 1985.

124-600 What is the roll-over?

(1) The roll-over is mainly as specified in Subdivision 124-A.

(2) However, you work out the *cost base and *reduced cost base of *CGT assets (that you are not taken to have *acquired before 20 September 1985) and that are part of the new right a bit differently where section 124-590 or 124-595 applies.

(3) The first element of your *cost base for each of those assets is:

where:

CB of post-CGT original right is the sum of the *cost bases of the *Crown leases (that were part of the original right) and that you *acquired on or after 20 September 1985 (just before the original right expired or was surrendered) reduced, if there is an excised part, by so much of those cost bases as is attributable to the excised part.

market value of all new assets is the market value of all *CGT assets (that you are not taken to have *acquired before 20 September 1985) that are part of the new right just after you acquired them.

market value of separate asset is the market value of the particular asset just after you *acquired it.

(4) The first element of the *reduced cost base of each of those assets is worked out similarly.

124-605 Change of lessor

(1) You treat a lease of land (whether or not it is a *Crown lease) granted to you (the fresh lease) as being a renewal of your original right if:

(a) after the grant of the original right, the land (the original land) to which it related became vested in an *Australian government agency (other than the one that granted the original right); and

(b) the second agency granted you the fresh lease over:

(i) the original land; or

(ii) the original land less an excised area; or

(iii) the original land and other land; and

(c) the fresh lease was granted under an *Australian law (other than the common law).

(2) You do this even if there is a period between the end of the original right and the grant of the fresh lease if you continued to occupy the original land during that period under a permission, licence or authority granted by the second agency.

Subdivision 124-K—Plant

Table of sections

124-655 Roll-over for depreciable plant

124-660 Right granted to associate

124-655 Roll-over for depreciable plant

There is a roll-over for a unit of *plant if:

(a) the plant is attached to land you hold under a *quasi-ownership right granted by an *exempt Australian government agency or an *exempt foreign government agency; and

(b) you are the *quasi-owner of the plant because of section 42-310; and

(c) the quasi-ownership right expires or is terminated or you surrender it; and

(d) you are granted a new quasi-ownership right over the land or an estate in fee simple in the land; and

(e) there is no roll-over for you under Subdivision 124-J (about Crown leases) or Subdivision 124-L (about prospecting and mining entitlements).

Note 1: The roll-over consequences are set out in Subdivision 124-A.

Note 2: This section provides a roll-over for plant in the limited circumstances where Subdivision 124-J cannot because a quasi-ownership right over land covers situations that a Crown lease does not (for example, an easement over land).

Note 3: If there has been a capital improvement to the quasi-ownership right: see section 108-75.

124-660 Right granted to associate

If the *quasi-ownership right or estate in fee simple is instead granted to an *associate or an *associated government entity of yours:

(a) your *reduced cost base of the *plant is reduced by the *undeducted cost of the plant just before the original quasi-ownership right expired or was surrendered or terminated; and

(b) there is no roll-over.

Subdivision 124-L—Prospecting and mining entitlements

Guide to Subdivision 124-L

124-700 What this Subdivision is about

This Subdivision sets out the situations in which there is a roll-over if a prospecting or mining entitlement expires or is surrendered and it is replaced by a new one.

Table of sections

Operative provisions

124-705 Extension or renewal of prospecting or mining entitlement

124-710 Meaning of prospecting entitlement and mining entitlement

124-715 Original entitlement differs in area from new entitlement

124-720 Part of original entitlement excised

124-725 Treating parts of new entitlement as separate assets

124-730 What is the roll-over?

[This is the end of the Guide.]

Operative provisions

124-705 Extension or renewal of prospecting or mining entitlement

(1) There is a roll-over if:

(a) you hold one or more *CGT assets that are *prospecting entitlements or *mining entitlements (the original entitlement); and

(b) the original entitlement expires or you surrender it; and

(c) you are granted one or more new prospecting entitlements or mining entitlements (the new entitlement); and

(d) the new entitlement relates to the same land as the original entitlement.

Note 1: The roll-over consequences are set out in Subdivision 124-A. They might be modified: see section 124-730.

Note 2: If there has been a capital improvement to the entitlement: see section 108-75.

(2) The new entitlement must have been granted in one of these ways:

(a) by renewing or extending the term of the original entitlement where the renewal or extension is mainly due to your having held the original entitlement; or

(b) by consolidating, or consolidating and dividing, the original entitlement; or

(c) by subdividing the original entitlement; or

(d) by converting a *prospecting entitlement to a *mining entitlement, or a mining entitlement to a prospecting entitlement; or

(e) by excising or relinquishing a part of the land to which the original entitlement related; or

(f) by expanding the area of that land.

124-710 Meaning of prospecting entitlement and mining entitlement

(1) A prospecting entitlement is:

(a) an authority, licence, permit or entitlement under an *Australian law or foreign law to prospect or explore for minerals in an area; or

(b) a lease of land that allows the lessee to prospect or explore for minerals on the land; or

(c) an interest in a thing referred to in paragraph (a) or (b).

(2) A mining entitlement is:

(a) an authority, licence, permit or entitlement under an *Australian law or foreign law to mine for *minerals in an area; or

(b) a lease of land that allows the lessee to mine for minerals on the land; or

(c) an interest in a thing referred to in paragraph (a) or (b).

124-715 Original entitlement differs in area from new entitlement

(1) Even if the new entitlement relates to different land to that to which the original entitlement related, this Subdivision applies as if it relates to the same land in these cases:

(a) the difference in area is not significant;

(b) the difference in market value is not significant;

(c) the new entitlement was granted to correct errors in or omissions from the original entitlement;

(d) it is otherwise reasonable for this Subdivision to apply in that way.

(2) However, the rule in subsection (1) does not apply if section 124-720 applies.

124-720 Part of original entitlement excised

(1) There is partial roll-over if you *acquired the original entitlement on or after 20 September 1985 and:

(a) the land to which the new entitlement relates is different in area to the land the subject of the original entitlement because a part (the excised part) of the land to which the original entitlement related was excised or you relinquished it; and

(b) you received a payment for the expiry or surrender of the original entitlement.

The payment can include giving property: see section 103-5.

Note: Section 124-730 sets out the effect on your cost base.

(2) There is no roll-over for the excised part. The *cost base of the excised part is so much of the *cost base of the original entitlement as is attributable to the excised part.

Its *reduced cost base is worked out similarly.

Note: You may make a capital gain or loss on the excised part because of CGT event C2.

124-725 Treating parts of new entitlement as separate assets

(1) Each part of a *prospecting entitlement or *mining entitlement that is part of the new entitlement is taken to be a separate *CGT asset to the extent that it relates to:

(a) land to which a prospecting entitlement or mining entitlement (that was part of the original entitlement) related where you *acquired the entitlement before 20 September 1985; and

(b) land to which a prospecting entitlement or mining entitlement (that was part of the original entitlement) related where you acquired the entitlement on or after 20 September 1985; and

(c) other land.

(2) You are taken to have *acquired each asset that is a separate *CGT asset because of paragraph (1)(a) before 20 September 1985.

124-730 What is the roll-over?

(1) The roll-over is mainly as specified in Subdivision 124-A.

(2) However, you work out the *cost base and *reduced cost base of *CGT assets (that you are not taken to have *acquired before 20 September 1985) and that are part of the new entitlement a bit differently where section 124-720 or 124-725 applies.

(3) The first element of your *cost base for each of those assets is:

where:

CB of post-CGT original entitlement is the sum of the *cost bases of the prospecting entitlements or mining entitlements (that were part of the original entitlement) and that you *acquired on or after 20 September 1985 (just before the original entitlement expired or was surrendered) reduced, if there is an excised part, by so much of those cost bases as is attributable to the excised part.

market value of all new assets is the market value of all *CGT assets (that you are not taken to have *acquired before 20 September 1985) that are part of the new entitlement just after you acquired them.

market value of separate asset is the market value of the particular asset just after you *acquired it.

(4) The first element of the *reduced cost base of each of those assets is worked out similarly.

 

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