CA50460 - MEA: Allowances and charges:
Balancing allowances: continuation of trade
Under CAA01/S428, if a trader permanently ceases to work
particular mineral deposit, without ceasing to trade, then a
balancing allowance will arise in respect of unrelieved qualifying
expenditure:
- on mineral exploration and access relating
solely to those deposits, or
- on the acquisition of a mineral asset
consisting of those deposits or any part of them.
However:
- where a person carrying on a trade of
mineral extraction is entitled to two or more mineral assets,
- which were previously comprised in or
otherwise derived from a single mineral asset,
- then a balancing allowance is not
available until he permanently ceases to work the deposits
comprised in the entire mineral assets concerned taken
together.
Where capital restoration costs are then incurred after the
cessation of working of those particular mineral deposits, then in
a continuing trade a subsequent balancing allowance may arise by
virtue of CAA01/S430 (1) when that restoration is complete, see
CA50280.
