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HMRC internal manual

Oil Taxation Manual

Corporation tax ring fence: first-year allowances for a ring fence trade: mineral extraction allowances - restrictions

These sections contain further rules relating to the timing and amount of first-year allowances and the rules dealing with artificially inflated claims to first-year allowances.


This section prevents any pre-17 April 2002 expenditure from qualifying for first-year allowances by disapplying, for this purpose, the provisions that deem pre-commencement expenditure to have been incurred on the first day of trading, even though it was actually incurred at some earlier time.


This section provides that the first-year allowances are to be given for the chargeable period in which the qualifying expenditure is incurred and that the rate is to be 100%. As with other first-year allowances, a claim need not be for the whole amount of any qualifying expenditure.


This section counters attempts to produce artificially inflated claims for MEA first-year allowances. It is aimed at transactions where the main object or one of the main objects is to obtain a first-year allowance which would not otherwise be due, or a first-year allowance of an inflated amount.