Taxes Consolidation Act 1997 section 680

Annual allowance for mineral depletion

Section 680 provides a mineral depletion allowance for capital expenditure incurred on acquiring a deposit of scheduled minerals or land containing such a deposit, where the acquisition is connected with the trade of working a qualifying mine.

• Capital expenditure on acquiring scheduled mineral assets after 31 March 1974 qualifies for mine development allowances under section 670, spread over the life of the mine or 20 years, rather than as an immediate allowance under section 673.
• The allowance is given as if the acquisition expenditure were expenditure on developing the mine, but it cannot also qualify as development or exploration expenditure.
• Pre-trading expenditure on acquiring scheduled mineral assets is deemed to have been incurred on the date the person commences the mining trade, provided the trade begins on or after 6 April 1974.
• The deeming of pre-trading expenditure to the commencement date ensures the allowance under subsection (1) applies in the same way as for expenditure incurred after trading begins.