(1)This section applies if a person carrying on a mineral extraction trade (“the buyer”) incurs capital expenditure on acquiring a mineral asset which is a UK oil licence, or an interest in such a licence, for the purposes of that trade.
(2)If this section applies, the buyer’s expenditure is qualifying expenditure only to the extent that it does not exceed—
(a)the original licence payment, or
(b)if the mineral asset is an interest in a UK oil licence, such part of the original licence payment as it is just and reasonable to attribute to the interest.
(3)In this section “the original licence payment” means the amount paid to the relevant authority for the purpose of obtaining the licence by the person to whom the licence was granted.
(4)This section does not affect any expenditure that is treated as qualifying expenditure on mineral exploration and access under—
section 407(5) (acquisition of mineral asset owned by previous trader), or
section 408(2) (acquisition of oil licence from non-trader).
(5)In this section “UK oil licence” and “the relevant authority” have the same meaning as in Chapter 3 of Part 12.