OT26251 - Capital Allowances: Mineral Extraction Allowance

Second-hand Licences

The term refers to the costs of buying into a field.

Where a trader incurs expenditure on the acquisition of (an interest in) a mineral asset within CAA2001/s394, certain restrictions on the amount of expenditure which that trader may claim as qualifying expenditure may apply. The restrictions do not apply where:

1. the purchased mineral asset is situated in the UK (including the territorial sea), and
2. the buyer’s expenditure is payments made under a contract entered into by him before 16 July 1985. This is the date on which the Consultative Document regarding changes in MOWA (Mines & Oil Wells Allowances) was published.