Capital Allowances Act 2001 section 411

Assets generally: limit is residue of previous trader's qualifying expenditure

Section 411 limits the qualifying expenditure a buyer can claim when acquiring a second-hand mineral extraction asset that was previously used in another trader's mineral extraction trade.

• When a mineral extraction trader buys an asset previously used in another trader's mineral extraction trade, qualifying expenditure is capped at the residue of the previous trader's qualifying expenditure
• The residue is calculated as the previous trader's original qualifying expenditure, minus allowances already claimed, plus any balancing charges that were made
• Where an asset is derived from or made up of other assets, the previous trader's qualifying expenditure and allowances are apportioned on a just and reasonable basis
• This cap does not affect any expenditure separately treated as qualifying expenditure on mineral exploration and access under sections 407 or 408