Corporation Tax Act 2009

Mineral royalties

258 Relief in respect of mineral royalties

(1) This section applies if in an accounting period a UK resident company carries on a UK property business the receipts of which consist of or include mineral royalties—

(a) which the company is entitled to receive under a mineral lease or agreement, and

(b) which are not chargeable to tax under Chapter 7 (rent receivable in connection with a UK section 39(4) concern).

(2) In calculating the profits of the business, the company is treated as—

(a) entitled to receive only half of the total of the mineral royalties arising under the lease or agreement in the accounting period, and

(b) making in the accounting period only half of the total of the payments made in respect of the management of the property concerned.

(3) Sections 274 to 276 (meaning of “mineral lease or agreement” and “mineral royalties”) apply for the purposes of this section as they apply for the purposes of Chapter 7.

(4) See also section 201 of TCGA 1992 (gains treated as accruing to a company entitled to receive mineral royalties).