Chapter 5: Other kinds of qualifying expenditure
Overview
1434.This Chapter deals with qualifying expenditure that is neither on mineral exploration and access nor on acquiring a mineral asset.
1435.Section 414 permits expenditure on works to be qualifying expenditure if the works would have no value if:
there were no mineral deposits; or
the mineral deposits could not be worked.
1436.Section 415 permits certain contributions, to works for the benefit of employees abroad, to be qualifying expenditure.
1437.Section 416 permits certain post cessation restoration expenditure to be treated as qualifying expenditure that was incurred on the last day of trading.
Section 414: Expenditure on works likely to become valueless
1438.This section is based on parts of sections 98(1), 105 and 161(2) of CAA 1990. Capital expenditure on the construction of certain works may be qualifying expenditure if the works would have little or no value if the source could not be worked.
1439.There is a minor change insubsection (1)(b) as in sections 400, 403, 407, 408 and 409. See Change 47 in Annex 1.
Section 415: Contribution to buildings or works for benefit of employees abroad
1440.This section is based on section 108 of CAA 1990. It provides that capital sums contributed to the cost of certain buildings or works, to be used essentially for the benefit of persons employed abroad, may be qualifying expenditure if connected with the working of a source outside the UK and the other conditions in the section are satisfied.
1441.There is a minor change in subsection (1)(a) as in sections 400, 403, 407, 408, 409 and 414 (paragraphs 1381, 1396, 1412, 1417, 1421 and 1439 above). See Change 47 in Annex 1.
Section 416: Expenditure on restoration within 3 years of ceasing to trade
1442.This section is based on section 109 of CAA 1990. It allows certain restoration expenditure to be qualifying expenditure provided it is incurred within three years of the mineral extraction trade ceasing. The expenditure must meet the condition that it would have been either qualifying expenditure or deductible as a trading expense if it had been incurred before the trade ceased.
1443.Allowances are only available in Part IV of CAA 1990 on qualifying expenditure that meets the purposes of the mineral extraction trade test in section 98(1) of CAA 1990. That purpose test is not reproduced in this section. This is a change that is favourable to the taxpayer. See Change 47 in Annex 1.
