Capital Allowances Act 2001 section 416C

Time when expenditure is incurred

Section 416C prevents certain timing rules from being used to re-date mineral extraction expenditure so that it qualifies for first-year allowances.

• When deciding if expenditure qualifies for first-year allowances under the mineral extraction rules, you must ignore certain provisions that artificially re-date when expenditure is treated as incurred.
• The first provision to ignore is section 400(4), which normally treats pre-trading mineral exploration expenditure as incurred on the first day of trading.
• The second provision to ignore is section 434, which normally treats other expenditure incurred for the purposes of a trade about to begin as incurred on the day trading starts.
• The practical effect is to prevent ring fence mineral extraction expenditure actually incurred before 17 April 2002 from being re-dated to a later trading start date in order to qualify for a first-year allowance.