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HMRC internal manual

Capital Allowances Manual

MEA: Qualifying expenditure: Acquisition of land: restriction of expenditure

One of the main categories of qualifying expenditure is that on the acquisition of a mineral asset.

The definition of ‘mineral asset’ in CAA01/S 397 includes mineral bearing land and any interest or right over such land.

However the effect of CAA01/S404 is to strip out any expenditure that represents the value of the land disregarding the presence of the minerals. Therefore only the proportion of expenditure attributable to the mineral content of the land is qualifying expenditure.

The amount to be excluded is so much of the expenditure as is equal to the undeveloped market value of the interest.