90‑40 Initial base value90‑40 Initial base value

90‑40 Initial base value

(1) The base value of the *starting base asset, for the *MRRT year in which the *start time for the asset happens, is: (a) if at all times between 2 May 2010 and 30 June 2012 the *entity that *held it also had the mining project interest (or held the *pre‑mining project interest from which the mining project interest *originated), and subsection (2) applies to the mining project interest—the sum of: (i) the *market value of the asset on 1 May 2010; and (ii) the sum of the amounts of *interim expenditure incurred in relation to the asset (other than amounts of interim expenditure incurred in relation to acquiring or bringing into existence another starting base asset); or (b) if paragraph (a) does not apply—the sum of the amounts of interim expenditure incurred in relation to the asset.

Note 1: Division 180 allows a “look‑back” approach to valuation to be chosen in some cases.

Note 2: If the asset is mine development expenditure, its market value on 1 May 2010 will be zero.

Note 3: Initial base values are separately assessed under Division 155 in Schedule 1 to the Taxation Administration Act 1953. Those assessed values are used in working out starting base allowances in all assessments of MRRT liabilities: see item 15 of Schedule 4 to the Minerals Resource Rent Tax (Consequential Amendments and Transitional Provisions) Act 2012.

(2) This subsection applies to a mining project interest if: (a) the mining project interest existed (or is a part of a mining project interest that existed) just before 2 May 2010; or (b) the mining project interest *originates from a *pre‑mining project interest that existed, or that is a part of a pre‑mining project interest that existed, just before 2 May 2010. (3) In working out the *market value of an asset that is treated as a single *starting base asset because of section 80‑30, disregard any liability of the *entity to pay any *private mining royalty to the extent that: (a) the royalty relates to *taxable resources extracted from the *project area for the mining project interest, or for a *pre‑mining project interest from which the mining project interest *originates; and (b) subsection 35‑40(3) does not apply to the royalty.

Note: Subsection 35‑40(3) provides that private mining royalties paid under a pre‑2 May 2010 arrangement are not covered by the rule that private mining royalties are excluded expenditure.