Newmont's Tax Win and the New Division 855 Landscape

The decision

We covered the Court's substantive findings in our earlier piece on Newmont Canada FN Holdings ULC v Commissioner of Taxation (No 2) [2025] FCA 1356. The Court rejected the Commissioner's expansive reading of "real property" under Division 855, held that plant and equipment on mining tenements is not TARP. It also set out detailed guidance on valuation methodology for mining projects, in particular, gold price assumptions, discount rates, NAV multiples, and discounts for lack of control and marketability.

Clayton Utz acted for the successful Newmont entities at trial.

Final orders — 20 August 2026

On 20 August 2026, the Court made the following final orders:

• The Referee's Report of Mr Andrea De Cian (dated 21 July 2026) was adopted, with a minor adjustment reducing TARP assets as a percentage of total assets from 41.5% to 41.4%.

• Newmont Australia's 16.2% investment in Regis Resources Ltd was valued at US$185.9 million, with US$6.8 million attributable to non-TARP current assets and US$179.1 million treated as TARP.

• The appeals were allowed.

• The Commissioner's objection decisions of 29 September 2017 were set aside.

• The matters were remitted for reassessment in accordance with law.

• The Commissioner was ordered to pay the applicants' costs — on a party and party basis before 6 August 2024, and on an indemnity basis thereafter.

The delay between the decision and the final orders reflects the time needed for an independent expert to calculate the inputs for the final TARP / Non-TARP calculation.This represents a final victory for Newmont.

Not necessarily the final chapter

The Commissioner has 28 days from the date of the final orders, until 17 September 2026, to file a notice of appeal. If an appeal is filed, the Full Federal Court will likely need to consider two key issues: the interaction between mining tenements, fixtures at general law, and the scope of TARP; and the weight given by the primary judge to the individual experts.

The retrospective changes that never were

Against the backdrop of the Newmont and YTL Power Investments decisions, the Government released exposure draft legislation on 10 April 2026 proposing sweeping changes to Division 855. Most controversially, the exposure draft sought to apply an expanded definition of "real property" retrospectively to CGT events occurring on or after 12 December 2006, nearly 20 years of prior transactions.

On 2 July 2026, the Bill introduced to Parliament removed the retrospective element. The expanded regime now applies only to CGT events occurring on or after commencement. Crucially, the Bill includes statutory protections preventing the Commissioner from reopening prior-year assessments outside ordinary amendment periods (subject only to fraud or evasion) and reviews or objections already on foot before 10 April 2026. The Bill is currently working its way through Parliament and may be subject to further amendments.

That said, the prospective reforms remain substantive. The new definition of "real property" is determined under Commonwealth law rather than State or territory law. It captures things "fixed or installed on land" - without a useful-life temporal requirement - as well as related licences, contractual rights, water entitlements, and mining information. The principal asset test moves from a point-in-time assessment to a 365-day testing period.

Practical implications

• For completed transactions: Foreign investors who disposed of interests in entities holding Australian mining or infrastructure assets before commencement may take some comfort. Retrospective exposure is off the table.

• For open assessment years: Companies with tax positions still open for years prior to the proposed legislative commencement date should take note.

1. Where the statutory amendment period has not yet expired, the Commissioner retains the ability to amend assessments under the existing law.

2. For taxpayers with open years who treated P&E on mining tenements or statutory infrastructure as non-TARP, these decisions could provide judicial justification for that position.

3. If Newmont is not overturned on appeal, the decision will serve as authoritative guideposts for the characterisation of assets under Division 855 as it applies to pre-commencement CGT events.

• For future transactions: The broadened TARP definition under the Bill will capture plant, equipment, and infrastructure on mining tenements prospectively. Inbound and outbound M&A, farm-ins, JV restructures, and scrip-for-scrip transactions involving tangible Australian assets will all need to be reassessed against the new regime.

• Valuation still matters: The Court's guidance on valuation inputs will remain authoritative well beyond this case. Key points for valuers:

1. Gold forwards/futures are not a reliable basis for long-term price assumptions. Consensus broker/analyst forecasts and qualitative modelling are preferred.

2. Reproduction or replacement cost is the appropriate methodology for P&E, not "building blocks" or notional lease approaches.

3. Discounts are acceptable to account for lack of control and for lack of marketability.

4. Mining information has intrinsic value and should not be ascribed a nil figure.

• No grandfathering: There are no transitional protections for existing investments. Future disposals of existing positions will be assessed under the new rules from commencement.

• ATO audit readiness: Expect the ATO to continue pursuing Division 855 positions aggressively, particularly on valuation. Taxpayers should document methodology choices, align expert assumptions with the Court's preferred approach, and prepare for review before an audit lands. We strongly suggest that you build defensible valuation files now.

• Watch the interaction with treaty obligations: The expanded TARP definition raises unresolved questions about consistency with Australia's bilateral tax treaty network — particularly taxing rights over "real property" under Article 6 and capital gains under Article 13. Whether the Commonwealth statutory definition can exceed treaty definitions has not been judicially tested.