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HMRC internal manual

Oil Taxation Manual

From
HM Revenue & Customs
Updated
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Capital Gains: Drilling Expenditure - Qualifying expenditure

TGCA92\S195(2)

To qualify for deduction, the expenditure must also have been:

  • of a capital nature on research and development;
  • allowed under CAA01\S441 (Research and Development Allowances) or allowable if a trade connected with that research had commenced before disposal; and
  • the subject of an research and development allowance recovery under CAA01\S443 or would have given rise to a recovery if a trade connected with that research had commenced before disposal.

TCGA92\S195(4)

TCGA92\S195(4) ensures that the capital gains deduction cannot exceed the amount of the actual, or deemed, research and development allowance claw back.