Income Tax (Trading and Other Income) Act 2005 section 319

Relief in respect of mineral royalties

Section 319 provides that only half the net profits from certain mineral royalties are charged to income tax, with the other half being subject to capital gains tax instead.

• Where mineral royalties fall outside the rules for mining and quarrying income, only 50% of the net profits are charged to income tax.
• The remaining 50% of the net profits are charged to capital gains tax under separate capital gains legislation.
• In practice, most mineral royalties will be taxed under the mining and quarrying income rules in Chapter 8 of Part 3, meaning this relief applies only in limited circumstances.
• The definitions of key terms such as "mineral royalties" follow those used in the mining and quarrying income rules.