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HMRC internal manual

Capital Allowances Manual

MEA: Scope of Relief: What is a “mineral extraction trade” ?

Allowances are available under CAA01/S394 (1) if a person “carries on a mineral extraction trade and incurs qualifying expenditure”.

A “mineral extraction trade” is defined in CAA01/S394 (2) as a trade that consists of or includes the working of a source of mineral deposits but only to the extent that the profits or gains from the trade are, or would be chargeable to tax.

CAA01/S394 (3) defines “mineral deposits” to include “any natural deposits capable of being lifted or extracted from the earth”, and confirms that “geothermal energy” is to be treated as a natural deposit for this purpose. All references to mineral deposits in the MEA legislation are to mineral deposits of a wasting nature (CAA/S394(4)).

“Source of mineral deposits” includes a mine, an oil well and a geothermal energy source (CAA01/S394 (5)).