Eligibility for farm-in agreement concessions
You need to have a qualifying farm-in agreement to be eligible for the concessions. A qualifying farm-in agreement is either a deferred farm-in agreement or an upfront farm-in agreement.
The main difference between an upfront and deferred farm-in agreement is when the interest in the exploration authority is transferred by the farmor to the farmee.
Under a deferred farm-in agreement, the transfer of an interest in the exploration authority to the farmee happens once the exploration amount specified has been spent.
Alternatively, under an upfront farm-in agreement, the interest in the exploration authority is immediately transferred to the farmee. After spending the exploration amount specified, the farmee is entitled to keep the interest.
The following table explains the main requirements for the concessions and disqualifying factors for each.
|Requirements to satisfy
|What the concessions
do not apply to
|There is a written agreement between farmor and farmee
|The exploration authority is granted and held by the farmor when the agreement is entered into
|The written agreement is either a deferred farm-in agreement or an upfront farm-in agreement
|Agreements that have elements of deferred and upfront farm-in agreements
|The farm-in agreement clearly specifies for each interest transferred:
|The whole of each exploration amount is spent after the agreement is entered into
|Amounts spent before the agreement is entered into
Read the public ruling about what constitutes an exploration amount (DA000.13) to learn more.
Requirements for keeping the concession
Because the concessions are applied when the agreement is first assessed for transfer duty, farmees need to satisfy ongoing requirements to keep the benefit of the concessions, including:
- spending the stated exploration amount on exploration and development activities described in the agreement by the expenditure completion date for the interest
- notifying the Commissioner of State Revenue and lodging the required documents within the prescribed time frames after spending the exploration amount for the interest
- notifying the Commissioner and lodging the required documents within the prescribed time frames if the exploration amount has not been spent by the specified date (farmees must notify the Commissioner where the expenditure completion date is agreed to be varied).