Part 2

Plant and machinery allowances
Chapter 13

Provisions affecting mining and oil industries

Expenditure connected with mineral extraction trades

Pre-trading expenditure on mineral exploration and access
161
1
This section applies if a person—
a
incurs pre-trading expenditure on the provision of plant or machinery for the purposes of mineral exploration and access, and
b
owns the plant or machinery on the first day of trading.
But this is subject to subsection (5).
2
The person is to be treated for the purposes of this Part as if he had—
a
sold the plant or machinery immediately before the first day of trading, and
b
on that first day incurred capital expenditure on the provision of the plant or machinery for the purposes of the trade.
3
The amount of the capital expenditure that the person is to be treated as having incurred is an amount equal to—
a
the pre-trading expenditure, or
b
if there has been an actual sale and re-acquisition before the first day of trading, the amount last incurred on the provision of the plant or machinery.
4
In this section—
a
“pre-trading expenditure” means capital expenditure incurred before the day on which a person begins to carry on a mineral extraction trade, and
b
“the first day of trading”, in relation to a person’s pre-trading expenditure, means the day on which that person begins to carry on the mineral extraction trade.
5
This section does not apply if the plant or machinery on which the pre-trading expenditure was incurred is sold, demolished, destroyed or abandoned before the first day of trading (but see section 402 (mineral extraction allowances: pre-trading expenditure on plant or machinery)).