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HMRC internal manual

Business Income Manual

Measuring the profits (particular trades): Mineral extraction: royalties relief: introduction

S201 Taxation of Chargeable Gains Act 1992; S157, S314, S319 and S340 Income Tax (Trade and Other Income) Act 2005; S135, S258 and S273 Corporation Tax Act 2009; Para45 Sch39 Finance Act 2012

This relief has been withdrawn in respect of mineral royalties that a person is entitled to receive on or after 1 April 2013 in respect of businesses subject to Corporation Tax and 6 April 2013 in respect of businesses subject to Income Tax.

If mineral royalties were received before 1 April 2013 (Corporation Tax) or before 6 April 2013 (Income Tax) they were regarded as divisible into equal income and capital parts. The half regarded as income remained subject to IT or CT and the half regarded as capital was charged to CGT (or as a chargeable gain for CT purposes) (see CG71700 onwards).