Overview
1390.This Chapter defines when expenditure on acquiring a mineral asset is qualifying expenditure. The expenditure must be capital expenditure and it must be for the purposes of the trade. This Chapter is subject to the rules in Chapter 4.
1391.Section 403 gives conditions for the expenditure to be qualifying expenditure. It points to exceptions and defines a term for use in this Chapter.
1392.Section 404 prevents the value of land from being qualifying expenditure so far as it is not attributable to the value of mineral deposits.
1393.Section 405 permits, in limited circumstances, some or all of the value excluded from qualifying expenditure under the previous section to become qualifying expenditure.
1394.Section 406 prevents expenditure from getting relief twice under both the lease premium rules in section 87 of ICTA and as a result of this Chapter.
Section 403: Qualifying expenditure on acquiring a mineral asset
1395.This section is based on parts of sections 98(1) and 105(1) and (3) of CAA 1990. It gives the conditions for expenditure on acquiring a mineral asset to be qualifying expenditure. It must be capital expenditure and incurred for the purposes of the mineral extraction trade.
1396.There is a minor change in subsection (1)(b) as in section 400(1)(b). See paragraph 1381 above and Change 47 in Annex 1.
1397.Subsection (2) signposts two limitations on subsection (1) later in this Chapter. Section 395 signposts limitations in other Chapters.
Section 404: Exclusion of undeveloped market value of land
1398.This section is based on part of section 110 of CAA 1990. It prevents the underlying value of land from being qualifying expenditure.
