A lessor of rights to work minerals in the United Kingdom may
incur expenses of management or supervision of those minerals. He
can claim relief for sums he pays out wholly, exclusively and
necessarily on such expenses including the cost of collection.
The relief for expenses of management or supervision is
limited to the amount of the tax paid by deduction or otherwise in
respect of the rent or royalties for that year, less any tax on
charges.
The rent or royalties fall within S122 ICTA1988 and only 50%
of receipts are taxed as income. The management expenses available
for set-off are also reduced by one-half. There are separate
instructions about relief in respect of mineral royalties received
at BIM62098 onwards.
