Capital Allowances Act 1990

107Pre-trading exploration expenditure

(1)This section applies to capital expenditure which—

(a)is incurred by any person on mineral exploration and access at any source, and

(b)is so incurred before he begins to carry on a trade of mineral extraction, and

(c)is not incurred on the provision of machinery or plant.

(2)Where this section applies to any capital expenditure and the mineral exploration and access is continuing at the source in question at the time when the person concerned begins to carry on a trade of mineral extraction, so much of the expenditure as exceeds any relevant capital sum received by him is qualifying expenditure.

(3)Where this section applies to any capital expenditure and the mineral exploration and access has ceased at the source in question before the time when the person concerned begins to carry on a trade of mineral extraction, so much of that expenditure as was incurred within the six years ending at that time and exceeds any relevant capital sum received by him shall be treated as qualifying expenditure incurred on the first day on which he begins to carry on that trade.

(4)In relation to capital expenditure to which this section applies, a relevant capital sum is a capital sum—

(a)which is received by the person incurring the expenditure before he begins to carry on a trade of mineral extraction; and

(b)which is or, as the case may be, to the extent to which it is reasonably attributable to the incurring of the expenditure at the source in question.

(5)Expenditure which is qualifying expenditure by virtue of subsection (2) or (3) above is in this Part referred to as pre-trading exploration expenditure.