Taxes Consolidation Act 1997 section 677

Investment allowance in respect of exploration expenditure

Section 677 provides for a supplementary exploration investment allowance equal to 20% of qualifying exploration expenditure incurred between 6 April 1974 and 1 January 2011.

• A person working a qualifying mine who incurs exploration expenditure on or after 6 April 1974 and before 1 January 2011 is entitled to an additional allowance, known as the exploration investment allowance, equal to 20% of that expenditure, on top of any mine development allowance already given.
• The allowance is made in taxing the trade for the same chargeable period as the mine development allowance, and any unused allowance for income tax purposes may be carried forward against future trading profits.
• No allowance is given for expenditure actually incurred before 6 April 1974, even if the Tax Acts deem it to have been incurred on or after that date, nor for expenditure deemed to have been incurred by someone other than the person who actually incurred it.
• The restriction on deemed expenditure does not apply where a parent exploration company is treated under section 675 as having incurred expenditure actually incurred by its wholly owned subsidiary in the same group.