Capital Allowances Act 2001 section 478

Persons having qualifying trade expenditure

Section 478 explains how mineral extraction allowances and charges relating to qualifying trade expenditure are given effect in calculating trading profits.

• Allowances and charges under the mineral extraction provisions are dealt with through the trading profit calculation.
• An allowance is treated as a deductible expense of the trade, reducing taxable profits.
• A charge is treated as a trading receipt, increasing taxable profits.
• This approach aligns the tax treatment of mineral extraction capital allowances with the general method used for other capital allowances given effect through the trade.