Taxes Consolidation Act 1997 section 674

Expenditure on abortive exploration

Section 674 provides relief for abortive exploration expenditure incurred by a person who commences working a qualifying mine, even where that expenditure was not connected to the mine being worked, subject to anti-avoidance restrictions.

• Abortive exploration expenditure not connected to the qualifying mine qualifies for a deemed mine development allowance when the person commences the mining trade, but expenditure incurred before 1 April 1990 that was also incurred more than 10 years before the trade commenced is excluded.
• Where the person is a company and there has been a change of ownership of that company (or its parent or wholly-owned subsidiary), no allowance is given for abortive expenditure incurred before the date of the ownership change; however, shares acquired by a Minister of the Government are ignored when determining whether a change of ownership has occurred.
• A person who takes over working a qualifying mine but did not incur the exploration expenditure connected with that mine cannot claim an allowance under this section or section 673 for any of their own prior abortive exploration expenditure.
• Subject to transitional relief under paragraphs 16 and 18 of Schedule 32, the same expenditure cannot qualify for an allowance both under this section and under any other provision of the Tax Acts.