Capital Allowances Act 2001 section 425

Receipt of capital sum

Section 425 deals with the treatment of capital sums received that are attributable to qualifying mineral extraction expenditure, requiring them to be brought into account as disposal values.

• When a person who has incurred qualifying expenditure receives a capital sum reasonably attributable to that expenditure, a disposal value must be recognised
• The disposal value to be brought into account is limited to the portion of the capital sum that is reasonably attributable to the qualifying expenditure
• The disposal value is recognised in the chargeable period in which the capital sum is received
• This section does not apply where the capital sum already falls to be dealt with under sections 421 or 422, preventing the same sum from being taxed twice