As a result of exploration or production activity on their land, landholders may receive compensation under the Petroleum and Gas (Production and Safety) Act 2004 or the Minerals Resources Act 1989. The compensation for exploration and production under Petroleum and Gas (Production and Safety) Act and for exploration under the Mineral Resources Act the compensation amounts may relate to the deprivation of possession of the surface of the land, diminution in the value of the land or diminution in the use made or that may be made of the land or any improvement on it, severance of any part of the land, any cost, damage or loss arising from the carrying out of the activities and consequential damages relating to the foregoing. For production under the Mineral Resources Act the compensation is likely to be different.
The taxation treatment of the compensation payments is complex and includes a consideration of the application of GST, income tax and capital gains tax rules to the compensation payments.
This event was for legal and accounting professionals who advise landholders on the contractual and taxation issues associated with land access arrangements for gas and mineral exploration and production.