Taxes Consolidation Act 1997 section 679

Exploration expenditure

Section 679 allows an exploration company to set off exploration expenditure against its profits, even where the company does not work a qualifying mine.

• A company whose main activity is exploring in the State for scheduled mineral deposits is deemed to be carrying on a mining trade and may claim allowances for exploration expenditure and related plant and machinery expenditure incurred on or after 1 April 1990.
• Exploration losses may be set off against total profits of the current and immediately preceding accounting periods, or treated as a terminal loss in the final accounting period, but may not be surrendered by way of general group relief.
• If the company begins actually to work a qualifying mine, the deemed trade and the actual trade are treated as the same trade, but unrelieved losses of the deemed trade may only be carried forward against mining income, and this carry-forward is denied if there is a change of ownership within 12 months before or 24 months after the company begins actually to trade.
• Expenditure that qualifies under this section cannot also qualify for any other allowance or deduction, and a non-resident exploration company deemed to be carrying on a mining trade does not thereby become entitled to repayment of deposit interest retention tax.