Capital Allowances Act 2001 section 416A

First-year allowances available for certain types of qualifying expenditure

Section 416A restricts the availability of first-year allowances for mineral extraction expenditure to expenditure that qualifies as first-year qualifying expenditure incurred wholly for the purposes of a ring fence trade.

• First-year allowances under Part 5 (mineral extraction allowances) are only available for first-year qualifying expenditure
• The expenditure must meet the conditions set out for ring fence trade expenditure
• Ring fence trade refers to UK oil and gas extraction activities subject to a special tax regime
• Expenditure that does not qualify as first-year qualifying expenditure may still be eligible for writing-down allowances in the normal way