Part 5

Mineral extraction allowances
Chapter 3

Qualifying expenditure on acquiring a mineral asset

Qualifying expenditure where buildings or structures cease to be used
405
1
This section applies if—
a
section 404 (exclusion of undeveloped market value of land) applies to limit the buyer’s qualifying expenditure on acquiring the mineral asset,
b
the undeveloped market value of the interest in land includes the value of any buildings or structures on the land, and
c
at the time of the acquisition, or at any later time, the buildings or structures permanently cease to be used for any purpose.
2
The buyer is to be treated—
a
as having incurred qualifying expenditure, on acquiring a mineral asset, of an amount equal to the unrelieved value of the buildings or structures, and
b
as having incurred it when the buildings or structures permanently cease to be used for any purpose.
3
The unrelieved value of the buildings or structures is—
V - (A - B)
where—
- V is the value of the buildings or structures at the date of the acquisition (disregarding any value properly attributable to the land on which they stand),
- A is the amount of any allowances made to the buyer under the provisions of this Act other than Part 10 (assured tenancy allowances) in respect of—
  1. the buildings or structures, or
  2. assets in the buildings or structures, and
- B is the amount of any balancing charges made on the buyer under those provisions in respect of those buildings or structures or assets in them.
4
References in this section to the time of acquisition are not affected by section 434 (time when expenditure incurred).