OT26207 - Capital Allowances: Mineral Extraction Allowance

Writing Down Allowances

Writing down allowances are made on a reducing balance basis. The rates of annual allowance are either 10% or 25% (CAA2001/418). Assets are not pooled, each being dealt with separately. This allows balancing adjustments to occur when, e.g. an interest in a block is disposed of or surrendered. In practice, some pooling of expenditure for computational convenience is accepted but:

Individual sources i.e. the licence area within a particular block should be dealt with separately.

Expenditure relievable at 10% needs to be distinguished.