Mining Valuations
Tenements / Landholder / Mining Rights
There are many elements at play when trying to ascertain on what value will duty be payable when acquiring either a tenement or mining interest direct, versus acquiring a landholding entity.
Opposite is a key list of topics that must be considered when determine the value or dutiable amount.
The Commisisoner has predominantly adopted support from Commissioner of State Revenue v Placer Dome Inc[2018] HCA 59.
This decisions was based under the WA Stamp Act 1921. We maintain there are differences that can apply to valuations under the the WA Duties Act.
Often milestone payments and contingent payments need to be understood and a value ascertained. It may not be simply taking the face value of the amount.
The liability date and hence the valuation date can be important. A terms agreement of heads of agreement may set an earlier valuation date.
However, the terms need to be considered to see if it does in fact trigger a liability.
The impact on escrowed shares should be considered to see its impact on value.
Some assets may be located in other jurisdictions or may be exempt. These should be understood prior to making submissions to a revenue office.
The Duties Act deals specifically on how information is to be considered when valuing property. This needs to be conveyed to a valuer when undertaking a valuation.
A valuation may start from a top approach, which can be based on the consideration and then adjust up or down, depending on the assets and liabilities.
The Duties Act requires a valuation of the “land” – this would suggest a bottom up.
The interaction of these and the consideration paid form a basis for submissions on how duty should be calculated.
How these interact with the value ( predominantly relating to landholder duty) and duty vary depending on the entity or assets being acquired.
Given our experience, we know how these can interplay.
Anything fixed to land is land. even if you do not own the land. Therefore when valuing land, this needs to be considered.
Choosing the correct valuer to undertake a valuation can be critical. As can be the instructions to the valuer.
We work with Australia’s leading valuers and can offer recommendations.
The legislation can be quite harsh if your value varies from the Commisisoner’s by more than 15%. ( The Commissioner will ask you to designate a valuation prior to her undertaking one)