Capital Allowances Act 2001 section 410

UK oil licence: limit is original licence payment

Section 410 caps the amount of qualifying expenditure when a mineral extraction trader acquires a UK oil licence or an interest in one, limiting it to the amount originally paid for the licence.

• When a mineral extraction trader buys a UK oil licence, the qualifying expenditure cannot exceed the original licence payment made to the relevant authority when the licence was first granted.
• If only an interest in a licence is acquired rather than the whole licence, the limit is reduced to a just and reasonable proportion of the original licence payment attributable to that interest.
• This cap does not affect any expenditure that is separately treated as qualifying expenditure on mineral exploration and access under section 407(5) or section 408(2).
• The terms "UK oil licence" and "the relevant authority" carry the same meanings as defined in Chapter 3 of Part 12 of the Act.