673 Allowance in respect of development expenditure and exploration expenditure

Summary

This section provides that a person working a qualifying mine may claim an immediate allowance in respect of the full amount of any qualifying development or exploration expenditure (whether successful or abortive) incurred on or after 6 April 1974. The relief is given by way of an increased mine development allowance under section 670.

Details

(1)(a) The development or exploration expenditure concerned is deemed to be expenditure on foot of which an allowance under section 670 may be granted. (This deeming provision is necessary since section 670 does not allow either abortive exploration expenditure or interest on borrowed money to meet development expenditure.)

(1)(b) The amount of the allowance to be made is an amount equal to the entire amount of the exploration expenditure plus the entire amount of the development expenditure less the estimated residual value of any assets representing the development expenditure at the end of the mine’s estimated life.

(1)(c) Any reference in the Tax Acts to an allowance under section 670 is to be read as including a reference to an allowance under this section.

(2) Abortive expenditure incurred before 1 April, 1990, which was also incurred more than 10 years before the mining trade commenced, is not eligible for a “deemed” mine development allowance.

(3) No allowance is given in respect of expenditure incurred before 6 April 1974, even where such expenditure may be deemed to have been incurred after that date.

Relevant Date: Finance Act 2021