The Tax and Superannuation Laws Amendment (2014 Measures No 3) Bill 2014 was introduced into the House of Reps on Thur 29.5.2014. It proposes to amend the capital allowances provisions in the ITAA 1997 [by amending s40-80(1) and adding s40-80(1AA)-(1AC)] to limit immediate deductibility of expenditure on mining rights and mining information [and varying the amortization of such expenditure, if not immediately deductible under new provisions in s40-95 – broadly the shorter of the life of the mine or 15 years].
DATE OF EFFECT: applies to transactions to acquire mining rights and mining information entered into after 7.30pm Australian Eastern Standard Time, 14 May 2013.
[LTN 102, 29/5/14]
Extract from Explanatory Memorandum
The new law will limit immediate deductibility of expenditure on mining information and mining rights first used for exploration to:
- mining rights and mining information acquired from an Australian Government authority;
- geological and geophysical data packages acquired from mining information providers; or
- newly created mining information.
Expenditure on mining rights and mining information that satisfy the first use test but are no longer eligible for the immediate deduction:
- are depreciable over the shorter of their effective lives or 15 years; and
- may be written off at the taxpayer’s choice if exploration is unsuccessful (ceases).
The amount or a portion of the amount written off will be clawed back if and when exploration is no longer unsuccessful (recommences).