Definitions

1   In this regulation:

"Act" means the Mineral Tax Act;

"deemed fiscal year end" means, in relation to a mine in respect of which a disposition referred to in section 2 is made, the day on which the fiscal year of the mine referred to in section 1 (5) (a) of the Act is deemed to have ended under that section;

"finished mineral product inventory" means mineral product that

(a) is described in the vendor's inventories in respect of the mine,

(b) is not used in the operation of the mine, and

(c) is held for sale.

[en. B.C. Reg. 346/95, s. 1.]

Mine dispositions

2   Where

(a) an operator disposes of an interest in a mine or a mine property and concurrently disposes of an equivalent interest in each of the assets used in the operation of the mine or mine property to the same purchaser, and

(b) the mine or mine property has been in commercial production at any time during the current fiscal year of the mine or the immediately preceding 84 months,

if the purchaser and vendor jointly elect in the form in the schedule,

(c) the vendor's proceeds of the disposition shall, for the purpose of section 9 (1) (g) (iii) of the Act, be deemed to be

(i) the proportion of the balance in the vendor's cumulative expenditure account, as that account stood at the deemed fiscal year end, that the fair market value of the interest in the mine or mine property disposed of bears to the fair market value of the vendor's interest in the mine or mine property at the deemed fiscal year end, less

(ii) the proportion, referred to in subparagraph (i), of the cost of the finished mineral product inventory not disposed of to the purchaser,

(d) the purchaser may include in the prescribed costs and expenses under section 9 (1) (b) of the Act the amount of the vendor's deemed proceeds of disposition of assets under paragraph (c), and no amount with respect to the acquisition of the interest in the mine or mine property or any assets acquired by virtue of the transaction shall be included in prescribed costs and expenses under any other provision of the Act or the regulations,

(e) the purchaser may add to the balances in the accounts of the purchaser referred to in subparagraphs (i) to (iv) in respect of the mine or mine property acquired, a proportion, not exceeding the proportion referred to in paragraph (c) (i), of the balances that were, at the deemed fiscal year end, in each of the corresponding accounts of the vendor in respect of that mine or mine property:

(i) the cumulative tax credit account under section 3 of the Act;

(ii) the reclamation tax credit account under section 5 of the Act;

(iii) the reclamation cost account under section 5 of the Act;

(iv) the earned depletion base account under section 11 (3) of the Act,

(f) for the purpose of sections 2 (1) and 3 (b) of the Act, for the fiscal year of the mine that is deemed by section 1 (5) (b) of the Act to commence on the date of the disposition, any amount that is to be added by the purchaser under paragraph (e) (i) of this section and deducted by the vendor under section 4 of this regulation shall be added to or deducted from, as the case may be, the balances referred to in each of sections 2 (1) (a) (i) and 3 (a) of the Act, and

(g) for the purpose of section 2 (2) of the Act, for the fiscal year of the mine that is deemed by section 1 (5) (b) of the Act to commence on the date of the disposition, any amount that is to be added by the purchaser under paragraph (e) (iv) of this section and deducted by the vendor under section 4 of this regulation shall be added to or deducted from, as the case may be, the balances referred to in section 2 (2) (a) of the Act.

[am. B.C. Reg. 346/95, s. 2.]

Time for filing joint election

3   (1) The joint election referred to in section 2 shall be delivered with the return of the vendor not more than 6 months after the fiscal year end of the mine.

(2) Despite subsection (1), on an application by the purchaser and the vendor, the commissioner may, whether or not the period within which the purchaser and the vendor were entitled to make an election under section 2 has expired,

(a) permit the purchaser and the vendor to amend or revoke an election made within that period, or

(b) extend the period within which an election under section 2 may be made.

[am. B.C. Reg. 346/95, s. 3.]

Vendor to reduce balances

4   Where the purchaser adds an amount under section 2 (e) to the balance in an account of the purchaser in respect of a mine or mine property, the vendor shall reduce by that amount the balance in the corresponding account of the vendor in respect of that mine or mine property.

[en. B.C. Reg. 346/95, s. 4.]