Capital Allowances Act 2001 section 395

Qualifying expenditure

Section 395 defines what counts as "qualifying expenditure" for the purposes of mineral extraction allowances, identifying the main categories and noting the exclusions and limitations that apply.

• Qualifying expenditure covers four main categories: mineral exploration and access costs, acquiring mineral assets, amounts treated as mineral exploration and access expenditure on acquisition of certain assets, and expenditure on works likely to become valueless and restoration expenditure.
• Expenditure that falls within the exclusions set out in section 399 cannot be qualifying expenditure, regardless of which category it might otherwise fall into.
• Even where expenditure does qualify, Chapters 4 and 5 may limit the amount that is treated as qualifying expenditure in certain circumstances.
• Amounts treated as qualifying expenditure on mineral exploration and access under sections 407(5) and 408(2) — relating to the acquisition of mineral assets from previous traders or oil licences from non-traders — are expressly included in the definition.