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»Ê¹ÚÌåÓýapp owner of mineral bearing land might have a genuine commercial reason for selling it with a right to re-purchase once the minerals had been removed. This page is about how a similar result might be achieved without incurring an unintended charge under CTA09/S224 or ITTOIA05/S284.

During the debate on the 1963 Finance Bill (Hansard 26 June 1963, column 1472) the Minister dealt with the case of a landowner who sold mineral bearing land on terms entitling him to repurchase after the minerals had been removed, thereby incurring a charge under CTA09/S224 or ITTOIA05/S284 (see PIM1224), which was not intended. In the following statement he suggested an alternative arrangement (the so-called “Treasury Arrangement�) under which a lump sum received is to be charged (now) to CGT.

“In the case where there is a genuine commercial reason for a restricted sale of the type caught by FA63/S24 (now CTA09/S224 or ITTOIA05/S284), there appears to be an alternative way of achieving much the same result. A landowner could enter into an arrangement under which he granted a lease of the surface for a small rent together with a licence in consideration of a lump sum to remove the minerals. »Ê¹ÚÌåÓýapp landowner would be chargeable on the rent but not, except in the unlikely event of the case falling within the charge under Case VII on short-term gains, on the lump sumâ€�.

See CA50330 onwards where a person incurs capital expenditure on a mineral asset which is, or includes, an interest in land and mineral extraction allowances are claimed.