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HMRC internal manual

Capital Allowances Manual

MEA: Allowances and charges: Balancing allowances: continuation of trade

Under CAA01/S428, if a trader permanently ceases to work a particular mineral deposit, without ceasing to trade, then a balancing allowance will arise in respect of unrelieved qualifying expenditure:

  • on mineral exploration and access relating solely to those deposits, or
  • on the acquisition of a mineral asset consisting of those deposits or any part of them.



  • where a person carrying on a trade of mineral extraction is entitled to two or more mineral assets,
  • which were previously comprised in or otherwise derived from a single mineral asset,
  • then a balancing allowance is not available until he permanently ceases to work the deposits comprised in the entire mineral assets concerned taken together.

Where capital restoration costs are then incurred after the cessation of working of those particular mineral deposits, then in a continuing trade a subsequent balancing allowance may arise by virtue of CAA01/S430 (1) when that restoration is complete, see CA50280.