Chapter 5U.K. Other kinds of qualifying expenditure
414 Expenditure on works likely to become valuelessU.K.
(1)Expenditure is qualifying expenditure if—
(a)it is capital expenditure on constructing works in connection with the working of a source of mineral deposits,
(b)it is incurred for the purposes of a mineral extraction trade, and
(c)the works—
(i)are likely to be of little or no value, when the source is no longer worked, to the last person working the source, or
(ii)if the source is worked under a foreign concession, are likely to become valueless, when the concession ends, to the last person working the source under the concession.
(2)For the purposes of subsection (1), expenditure on constructing works does not include expenditure on acquiring the site of the works or any right in or over the site.
(3)In subsection (1)(c) “foreign concession” means a right or privilege granted by the government of, or any municipality or other authority in, a territory outside the United Kingdom.
415 Contribution to buildings or works for benefit of employees abroadU.K.
(1)Subject to subsection (3), expenditure is qualifying expenditure if—
(a)it is incurred by a person carrying on a mineral extraction trade outside the United Kingdom and for the purposes of that trade,
(b)it is a contribution consisting of a capital sum to the cost of buildings or works to which this section applies, and
(c)the buildings or works are likely to be of little or no value, when the source is no longer worked, to the last person working the source.
(2)The buildings or works to which this section applies are—
(a)buildings to be occupied by persons employed at or in connection with the working of a source outside the United Kingdom;
(b)works for the supply of water, gas or electricity wholly or mainly to buildings occupied or to be occupied by persons so employed;
(c)works to be used to provide other services or facilities wholly or mainly for the welfare of persons so employed or their dependants.
(3)Expenditure is not qualifying expenditure if the person making the contribution—
(a)acquires an asset as a result of the expenditure, or
(b)is entitled to an allowance for the expenditure under any other provision of the Tax Acts.
416 Expenditure on restoration within 3 years of ceasing to tradeU.K.
(1)If—
(a)a person who has ceased to carry on a mineral extraction trade incurs expenditure on the restoration of a relevant site, and
(b)the expenditure is incurred within 3 years from the last day of trading and meets the further conditions in subsection (3),
the net cost of the restoration is qualifying expenditure.
(2)The qualifying expenditure is treated as incurred on the last day of trading.
(3)The further conditions are that the expenditure—
(a)has not been deducted in calculating for tax purposes the profits of any trade carried on by that person, and
(b)would have been—
(i)deductible in calculating the profits of the trade, or
(ii)capable of being qualifying expenditure under this Chapter,
if the expenditure had been incurred while the trade was being carried on.
(4)If any expenditure incurred by a person is qualifying expenditure under this section—
(a)the whole of the expenditure on the restoration (not just the net cost) is not deductible in calculating the person’s income for any tax purposes, and
(b)none of the amounts subtracted to produce the net cost is to be treated as the person’s income for any tax purposes.
(5)“Restoration” includes—
(a)landscaping,
(b)in relation to land in the United Kingdom, the carrying out of any works required as a condition of granting planning permission for development consisting of the winning and working of minerals, and
(c)in relation to land outside the United Kingdom, the carrying out of any works required by any equivalent condition imposed under the law of the territory in which the land is situated.
(6)A “relevant site” means—
(a)the site of a source to the working of which the mineral extraction trade related, or
(b)land used in connection with working such a source.
(7)“The net cost of the restoration” means the expenditure incurred on the restoration less any amounts—
(a)received within 3 years from the last day of trading, and
(b)attributable to the restoration of the relevant site (for instance, amounts for spoil or other assets removed from the site or for tipping rights).
(8)All such adjustments are to be made, by way of discharge or repayment of tax or otherwise, as are necessary to give effect to this section.