Chapter CG71740
| Published date | 12 March 2016 |
| Record Number | CG71740 |
When the underlying minerals have been extracted from land, the value of that land can be considerably diminished. If certain conditions are satisfied, then where either a mineral lease ends or the land is disposed of prior to its expiry, a `terminal loss relief’ can be claimed.
This relief has been withdrawn by FA 2012/Sch 39/Para 46 for any mineral leases or agreements commencing on or after 1 April 2013 (for businesses subject to Corporation Tax) and 6 April 2013 (for businesses subject to Income Tax). Terminal loss relief will continue to apply to mineral leases and agreements entered into before those dates but which end (or are disposed of) after those dates.
Definitions TCGA92/S202 and ITTOIA05/S341-3 and CTA09/S274-6
The terms ‘minerals’, ‘mineral royalties’ and ‘mineral lease or agreement’ are defined in full in ITTOIA05/S341-3 (for individuals) and CTA09/S274-6 (for companies). Brief descriptions of these terms are:-
- ‘minerals’ means all substances in or under the land which are normally extracted by underground or surface working, but excluding water, peat, top-soil and vegetation.
- ‘mineral royalties’ means royalties receivable on or after 6 April 1970 under a mineral lease or other agreement relating to the winning and working of minerals.
- ‘mineral lease or agreement’ means any lease or similar agreement granting the right to win and work minerals in the United Kingdom.
For the purposes of these definitions, ‘winning’ means getting access to the minerals and ‘working’ means getting them out of the ground.
‘Relevant event’ means either the expiry or termination of the mineral lease or agreement or the disposal (deemed or actual) of the land subject to the mineral lease or agreement, TCGA92/S202 (2).
‘Terminal loss’ means a loss arising as the result of a claim under TCGA92/S202 (3) or (7).
Persons eligible to claim TCGA92/S202 (1)
A person is eligible to claim terminal loss relief under TCGA92/S202 if, at the time of the relevant event, he or she
- is entitled to receive mineral royalties under the lease or agreement in question, and
- has an interest in the land to which the lease or agreement relates.
No special form for a claim under TCGA92/S202 (3) or (7) is prescribed or provided.
TCGA92/S203 (2) provides that a claim under Section 202 must be made within four years from the date of the relevant event.
Expiry or termination of lease TCGA92/S202 (3)
When...
To continue reading
Request your trial