Capital Allowances Act 2001 section 400

Qualifying expenditure on mineral exploration and access

Section 400 sets out the conditions under which expenditure on mineral exploration and access qualifies for mineral extraction allowances, including rules for expenditure incurred before the trade begins.

• Expenditure on mineral exploration and access qualifies for allowances only if it is capital expenditure incurred for the purposes of a mineral extraction trade.
• Expenditure incurred in connection with a mineral extraction trade that a person carries on, or will subsequently carry on, is automatically treated as incurred for the purposes of that trade.
• Pre-trading expenditure on mineral exploration and access only qualifies to the extent permitted by Section 401 (pre-trading exploration expenditure) or Section 402 (pre-trading expenditure on plant or machinery).
• Any pre-trading expenditure that does qualify is treated as incurred on the first day of trading — the day on which the person begins to carry on the mineral extraction trade.