Capital Allowances Act 2001 section 416B

Expenditure incurred by company for purposes of a ring fence trade

Section 416B provides the conditions under which expenditure incurred by a company wholly for the purposes of a ring fence trade qualifies for first-year allowances under the mineral extraction allowances regime.

• Expenditure incurred on or after 17 April 2002 by a company wholly for the purposes of a ring fence trade qualifies as first-year qualifying expenditure, subject to two exclusions
• Expenditure on acquiring a mineral asset (as defined in section 403) is excluded from first-year qualifying expenditure
• Expenditure on acquiring an asset that represents expenditure incurred by a connected company is also excluded, including any results obtained from mineral exploration and access activities
• A ring fence trade is one subject to the supplementary charge under section 330(1) of the Corporation Tax Act 2010