Part 5 Mineral extraction allowances
Chapter 1 Introduction
394 Mineral extraction allowances
1
Allowances are available under this Part if a person carries on a mineral extraction trade and incurs qualifying expenditure.
2
In this Part “mineral extraction trade” means a trade which consists of, or includes, the working of a source of mineral deposits.
3
In this Part “mineral deposits” includes any natural deposits capable of being lifted or extracted from the earth, and for this purpose geothermal energy is to be treated as a natural deposit.
4
Any reference in this Part to mineral deposits is to mineral deposits of a wasting nature.
5
In this Part “source of mineral deposits” includes a mine, an oil well and a source of geothermal energy.
395 Qualifying expenditure
1
In this Part “qualifying expenditure” means—
a
expenditure on mineral exploration and access which is qualifying expenditure under Chapter 2,
b
expenditure on acquiring a mineral asset which is qualifying expenditure under Chapter 3,
c
expenditure which is treated as qualifying expenditure on mineral exploration and access under section 407(5) or 408(2), and
d
expenditure which is qualifying expenditure under Chapter 5 (expenditure on works likely to become valueless and post-trading restoration expenditure).
But this is subject to subsections (2) and (3).
2
Expenditure is not qualifying expenditure if it is excluded from being qualifying expenditure by section 399.
3
Chapter 4 contains provisions limiting in certain cases the amount of expenditure which is qualifying expenditure.
396 Meaning of “mineral exploration and access”
1
In this Part “mineral exploration and access” means—
a
searching for or discovering and testing the mineral deposits of a source, or
b
winning access to such deposits.
2
Expenditure on seeking planning permission necessary to enable—
a
mineral exploration and access to be undertaken at any place, or
b
any mineral deposits to be worked,
is treated as expenditure on mineral exploration and access if planning permission is not granted.
3
“Seeking planning permission” includes pursuing an appeal against a refusal to grant planning permission.
397 Meaning of “mineral asset”
In this Part “mineral asset” means—
a
any mineral deposits or land comprising mineral deposits, or
b
any interest in or right over such deposits or land.
398 Relationship between main types of qualifying expenditure
Subject to Chapter 4, expenditure on—
a
the acquisition of, or of rights over, the site of a source of mineral deposits, or
b
the acquisition of, or of rights over, mineral deposits,
is to be treated as expenditure on acquiring a mineral asset and not as expenditure on mineral exploration and access.
399 Expenditure excluded from being qualifying expenditure
1
Expenditure on the provision of plant or machinery is not qualifying expenditure except as provided by section 402 (pre-trading expenditure on plant or machinery).
2
Expenditure on works constructed wholly or mainly for subjecting the raw product of a source to any process is not qualifying expenditure, unless the process is designed for preparing the raw product for use as such.
3
Expenditure on buildings or structures provided for occupation by, or for the welfare of, workers is not qualifying expenditure except as provided by section 415.
4
Expenditure on a building is not qualifying expenditure if the whole of the building was constructed for use as an office.
5
Subsection (6) applies if part of a building or structure has been constructed for use as an office.
6
The expenditure on the office part is not qualifying expenditure if it was more than 10% of the capital expenditure incurred on the construction of the whole.