Capital Allowances Act 2001 section 88

Expenditure incurred pre-1st April 1986

Section 88 sets out how mineral extraction allowances under Part 5 of the Capital Allowances Act 2001 apply to expenditure incurred before 1st April 1986, known as "old expenditure".

• Part 5 mineral extraction allowances generally do not apply to expenditure incurred before 1st April 1986, except in specified circumstances relating to pre-trading exploration costs where no prior allowance had been claimed
• Certain transitional treatments from the Finance Act 1986 are preserved, including expenditure deemed to have been incurred on 1st April 1986, allowances previously treated as made, and amounts treated as qualifying expenditure
• Where old expenditure relates to the acquisition of a mineral asset and paragraph 6(4)(a) of Schedule 14 to the Finance Act 1986 applied, no deduction from a disposal receipt may be made for the undeveloped market value of the land
• When a balancing charge arises on old expenditure treated as qualifying expenditure, allowances previously granted under the Capital Allowances Act 1968 must be taken into account, apportioned on a just and reasonable basis where only part of the outstanding balance is involved