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HMRC internal manual

Business Income Manual

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

S157, S314 and S340 Income Tax (Trade and Other Income) Act 2005; S135, S258 and S273 Corporation Tax Act 2009

This relief has been withdrawn in respect of mineral royalties that a person is entitled to receive on or after 1 April 2013 in respect of businesses subject to Corporation Tax and 6 April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

In the case of royalties receivable before those dates, to qualify for the relief in BIM62090, the royalties had to be received under an agreement under which minerals are being, or were to be, worked in the UK. The terms ‘mineral royalties’, ‘minerals’ and ‘mineral lease or agreement’ are defined in the legislation. Only payments that related to the winning and working of minerals qualified. Broadly ‘winning’ means getting at the minerals and ‘working’ means getting them out of the ground.