Transfers of Queensland exploration tenements to be liable for duty
Jan 2012 |Transfers of interests in exploration permits and authorities to prospect will be liable for duty up to 5.25% of the transaction value following a move by the Queensland Government to amend the definition of statutory licences in the Duties Act 2001.
Previously, exploration permits and authorities to prospect were exempt from transfer duty and were not treated as land for the purposes of landholder duty (formerly land rich duty).
However, following the recent mid-year budget announcement by the Queensland Treasurer, authorities to prospect granted under the Petroleum and Gas (Production and Safety) Act 2004 and prospecting and exploration permits granted under the Mineral Resources Act 1989, the Geothermal Exploration Act 2004 and the Greenhouse Gas Storage Act 2009 will now be considered dutiable property for the purposes of the Duties Act 2001. Accordingly, resources companies entering into joint ventures, farm-ins and other transactions granting an interest in a tenement, will need to consider their duty position.
The changes became effective from 10:30am on 13 January 2012. As a result, duty will apply to agreements for transfer and transfers made or entered into at or after this time.
Pending assignments and agreements to transfer made prior to 10:30am 13 January 2012 will not be liable for transfer duty, even if the transfer is not effected until after the commencement of the new rule. Parties seeking to claim an exemption on this basis will need to supply the Department of Employment, Economic Development and Innovation (DEEDI) with a statutory declaration confirming the agreement date before the transfer will be processed.
Exploration tenements will also be included as landholdings for the purposes of levying duty on acquisitions in land rich companies or unit trusts. Landholder duty will apply to all transactions where a person or entity acquires a 50% or greater interest in an unlisted company or private unit trust with landholdings in Queensland worth $2 million. For listed companies and unit trusts, the threshold is 90%.