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HMRC internal manual

Capital Allowances Manual

HM Revenue & Customs
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MEA: Qualifying expenditure: Pre-trading expenditure: deemed trading purpose

Expenditure on exploration itself is not regarded as incurred for a trading purpose, since it is preliminary to the trade of commercial exploitation of the minerals.

However, CAA01/S400 (2) provides that qualifying expenditure on mineral exploration and access incurred in connection with a trade of mineral extraction is to be treated as incurred for the purposes of that trade whether it was incurred before or after the trade commenced.