Capital Allowances Act 2001 section 417

Determination of entitlement or liability

Section 417 explains how to determine whether a person who has incurred qualifying mineral extraction expenditure is entitled to an allowance or liable to a balancing charge for a chargeable period.

• Entitlement to allowances or liability to charges depends on comparing two figures: unrelieved qualifying expenditure (UQE) and total disposal receipts (TDR) for the period
• Where UQE exceeds TDR, the person is entitled to a writing-down allowance (or, in specific circumstances, a balancing allowance)
• Where TDR exceeds UQE, the person is liable to a balancing charge
• Unlike plant and machinery allowances, qualifying mineral extraction expenditure is not pooled, but writing-down allowances are still calculated on a reducing-balance basis