Capital Allowances Act 2001 section 541

Mineral extraction

Section 541 deals with how contribution allowances work under the mineral extraction allowances regime (Part 5) when a contributor makes a contribution for the purposes of their own trade.

• The section applies where the general conditions for contribution allowances are satisfied and the contributor (C) makes the contribution for the purposes of a trade that C carries on or will carry on.
• C is treated as though the contribution were expenditure C incurred on providing an asset similar to the one actually provided by means of the contribution, for the purposes of C's own trade.
• The asset is treated as being in use for the purposes of C's trade at all relevant times, ensuring that the mineral extraction allowance conditions are met.
• Unlike the equivalent rules for plant and machinery or research and development, there is no provision for a landlord's contribution towards a tenant's trade, because mineral extraction allowances are only available to persons who themselves carry on a trade.