Corporation Tax Act 2009 section 64

Limit on deductions if tenant entitled to mineral extraction allowance

Section 64 prevents a double tax deduction where a tenant who occupies land for trade purposes has already claimed a mineral extraction allowance on the cost of acquiring an interest in that land.

• Where a tenant has claimed a mineral extraction allowance under Part 5 of the Capital Allowances Act 2001 for expenditure on acquiring a mineral asset, the deduction otherwise available under section 63 is restricted or eliminated to prevent double relief.
• If the mineral extraction allowance covers the whole of the expenditure on acquiring the interest in the land, no section 63 deduction is available for any qualifying day in that or any later accounting period.
• If the allowance covers only part of the expenditure, the section 63 deduction for each qualifying day is reduced by multiplying the original deduction by the fraction (WE − AP) / WE, where WE is the whole expenditure and AP is the allowable part that attracted the mineral extraction allowance.
• This anti-duplication rule applies from the accounting period in which the mineral extraction allowance is first obtained, and continues for all subsequent accounting periods.