Taxes Consolidation Act 1997 section 676

Expenditure incurred by person not engaged in trade of mining

Section 676 allows a person who purchases assets representing successful exploration expenditure from the original explorer to claim relief for that expenditure when they carry on a mining trade in connection with the deposit found.

• Where a person finds a scheduled mineral deposit through exploration expenditure and sells the assets representing that expenditure to another person who then mines the deposit, the buyer is deemed to have incurred exploration expenditure equal to the lesser of the expenditure represented by the assets or the price paid for those assets.
• The deemed expenditure is treated as incurred on the date the buyer commences the mining trade, but relief is only available if the working of the deposit results in scheduled minerals being produced in reasonable commercial quantities.
• Subject to transitional provisions in Schedule 32 (paragraphs 16 and 18), expenditure that qualifies for relief under this section cannot also qualify for a deduction or allowance under any other provision of the Tax Acts.
• Exploration expenditure that qualifies for relief under this section is excluded from the additional 20% investment allowance provided for in section 677.