Section DT 14 — Income Tax Act 2007: Farm-out arrangements

DT 14 Farm-out arrangements When this section applies (1) This section applies when a farm-in party under a farm-out arrangement incurs farm-in expenditure that, if it were incurred by the farm-out party, would be petroleum development expenditure, exploratory well expenditure, or prospecting expenditure. Treatment of farm-in expenditure (2) The farm-in expenditure is treated as if it were petroleum development expenditure, exploratory well expenditure, or prospecting expenditure, as applicable. Deduction (3) The farm-in party is allowed a deduction for the farm-in expenditure that is incurred under the farm-out arrangement on or after 16 December 1991. Relationship with section DZ 5 (4) Farm-in expenditure that is incurred before 16 December 1991 is dealt with in section DZ 5 (Farm-out arrangements for petroleum mining before 16 December 1991). Link with subpart DA (5) This section supplements the general permission and overrides the capital limitation. The other general limitations still apply. Defined in this Act: capital limitation , deduction , exploratory well expenditure , farm-in expenditure , farm-in party , farm-out arrangement , general limitation , general permission , petroleum development expenditure , prospecting expenditure , supplement , Compare: 2004 No 35 s DT 14