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HMRC internal manual

Capital Allowances Manual

MEA: Qualifying expenditure: Pre-trading expenditure: activities continue

Relief for pre-trading expenditure on mineral access and exploration that is not on the provision of plant and machinery is given under CAA01/S401.

If the activity of mineral exploration and access at a source:

  • is continuing when the person incurring the expenditure starts a trade of mineral extraction, then
  • the excess of the expenditure incurred over any capital sum received (which is reasonably attributable to the expenditure) is treated as qualifying expenditure.


The expenditure is treated as incurred on the first day of trading. Writing-down and balancing allowances are given under the normal rules (there is no immediate balancing adjustment on commencement).