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Capital Allowances Act 2001

Overview

587.This Chapter brings together rules which apply only to the mining and oil industries.

588.Section 159 states the meaning of “mineral extraction trade”.

589.Section 160 treats expenditure incurred for mineral exploration and access in connection with a mineral extraction trade as incurred for the purposes of the trade.

590.Section 161 deals with relief for pre-trading expenditure on mineral exploration and access.

591.Section 162 sets up a separate qualifying activity for a ring fence trade.

592.Section 163 defines “abandonment expenditure” for the purposes of the next two sections.

593.Section 164 gives special relief for abandonment expenditure in ring fence trades.

594.Section 165 provides relief for abandonment expenditure in the three years following the cessation of trade.

595.Section 166 is an anti-avoidance provision applying if an interest in an oil field is transferred.

596.Sections 167 to 171 deal with production sharing contracts. Section 167 sets out the general conditions which apply. Section 168 treats expenditure incurred on plant or machinery by a contractor under a production sharing contract as being incurred on plant or machinery. Section 169 provides a similar rule for expenditure incurred by “participators” in production sharing contracts. Section 170 deals with the acquisition of an interest in a production sharing contract by a participator. Section 171 deals with disposal values on the cessation of ownership under subsection (2) of any of the previous three sections.

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