Overview
1349.This Part provides for mineral extraction allowances. These can be writing-down allowances or balancing allowances. It also provides for balancing charges.
1350.Chapter 1:
provides that allowances are available to mineral extraction traders who incur qualifying expenditure;
defines “qualifying expenditure” and the other main terms that are used in Part 5; and
signposts the detail on qualifying expenditure in the next four Chapters and sets out general exclusions from qualifying expenditure.
1351.Chapter 2 deals with qualifying expenditure on mineral exploration and access. It also deals with rules that apply if expenditure is incurred on mineral exploration and access before the mineral extraction trade starts.
1352.Chapter 3 deals with qualifying expenditure on acquiring a mineral asset. It contains special rules if an interest in land is involved. These prevent the non-mineral value of land from being qualifying expenditure. They also prevent double relief through capital allowances and the lease premium rules in section 87 of ICTA.
1353.Chapter 4 deals with second hand assets. It includes cases in which expenditure on acquiring a mineral asset is treated as if it was qualifying expenditure on mineral exploration and access. And it also includes cases in which qualifying expenditure is limited by reference to the circumstances of someone who previously sold the asset concerned.
1354.Chapter 5 deals with other sorts of qualifying expenditure. These relate to certain works, contributions and post-cessation restoration expenditure.
1355.Chapter 6 provides for the calculation of allowances and charges. Expenditure is not pooled. Allowances and disposal receipts reduce qualifying expenditure. Writing-down allowances are given at 10% a year on mineral asset expenditure or 25% on other expenditure on a reducing-balance basis. Disposal receipts may trigger balancing charges to recover allowances previously given. Balancing allowances are available when certain events occur.
1356.Chapter 7 provides for giving effect to allowances and charges and other matters.