All rental collected by the Minister is paid into Treasury general revenue unless that lease or licence is granted over freehold land or native title land that is held in exclusive possession. In these cases, 5% of the rental is retained by Government and the remaining 95% is disbursed to the relevant owners of the land.
From 1 January 2020, the practice of not charging the full rental to tenement holders who are also the freeholder owner of the relevant land will cease. This means that where a holder of a mining lease, retention lease or miscellaneous purpose licence is also the holder of the freehold land, the Minister will now invoice the tenement holder for 100% of rental fees, rather than invoicing for 5% as has occurred in the past and there will be no entitlement to distribution of rent.
This applies where a tenement holder and the owner of the freehold land are the same legal entity or natural person. This extends to related body corporates where the tenement holder is a company incorporated under the Corporations Act 2001 (Cth). Section 50 of the Corporations Act defines bodies as being related where a body corporate is:
(a) a holding company of another body corporate; or
(b) a subsidiary of another body corporate; or
(c) a subsidiary of a holding company of another body corporate.
Natural persons
Natural persons where the same person is a tenement holder and an owner of the land, irrespective of whether the tenement or the land is owned in whole or part by that person are affected by this change.
- Example - 95% return: Mr Doug Brown holds an extractive minerals lease over freehold land owned by his wife Mrs Karen Brown. Doug will pay 100% of the rent, and his wife Karen will receive the 95% return.
- Example – No return: Mr Doug Brown holds an extractive minerals lease over freehold land owned by himself and his wife. Doug will pay the full rental amount and there is no rent returned to either himself or his wife.