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HMRC internal manual

Capital Allowances Manual

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

Where mineral exploration and access activity has ceased at a particular source before the commencement of a trade of mineral extraction, the expenditure, net of any reasonably attributable capital sum received, is treated as qualifying expenditure incurred on the first day of trading.

Expenditure incurred more than six years before commencement is excluded.

Expenditure qualifying under this section (CAA01/S401 (2) & (4)) is relieved in full on trade commencement by way of a balancing allowance. This is due to the provisions of CAA01/S426.

There is no similar provision for relief on expenditure on a mineral asset which has been abandoned, given up, etc.