Commentary

B3.407 Pre-trading expenditure on mineral exploration and access

Business tax
Business tax | Commentary

B3.407 Pre-trading expenditure on mineral exploration and access

Business tax | Commentary

B3.407 Pre-trading expenditure on mineral exploration and access

Allowances under the current code are given to a person who is carrying on a mineral extraction trade. It is a question of fact as to when such trading begins, but as regards the development of oil and natural gas resources it is agreed1 that the five stages in the sequence of such exploration and development are:

  1.  

         Stage 1 Geological and geophysical;

  2.  

         Stage 2 Exploration drilling;

  3.  

         Stage 3 Appraisal drilling;

  4.  

         Stage 4 Development drilling;

  5.  

         Stage 5 Production operations.

These stages are described in detail in D7.905.

HMRC are prepared

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