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HMRC internal manual

Oil Taxation Manual

Capital allowances: mineral extraction allowance - definition of mineral exploration and access


This is defined at CAA2001\S396 as “searching for or discovering and testing the mineral deposits of a source” or “winning access to any such deposits”. A source of mineral deposits includes an oil well (CAA2001\S394(5)). Thus it includes most capital expenditure on exploration and appraisal.

Most exploration and appraisal is also research and development for the purposes of this part of the Capital Allowances Act (CAA2001\S437(2)(b)) and, as such, companies may make a claim for Research and Development Allowances and may choose between appropriate capital allowances claims (see OT26305).

Provisions ensure that there can be no double claims.