Capital Allowances Act 2001 section 398

Relationship between main types of qualifying expenditure

Section 398 clarifies how expenditure on acquiring mineral sites or mineral deposits should be categorised for capital allowance purposes, drawing a boundary between two types of qualifying expenditure.

• Expenditure on acquiring a site (or rights over a site) of a source of mineral deposits is treated as expenditure on acquiring a mineral asset
• Expenditure on acquiring mineral deposits themselves (or rights over them) is also treated as expenditure on acquiring a mineral asset
• Neither type of expenditure qualifies as mineral exploration and access expenditure
• This classification is subject to exceptions for certain pre-trading exploration expenditure and the rules in Chapter 4 of Part 5