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One of the main items of qualifying expenditure for mineral extraction allowances is the acquisition of a mineral asset (see B3.406) which includes land with mineral deposits or any rights or interest in such land. In order that the qualifying expenditure only relates to the land which includes the presence of minerals, the value which represents the value of the land without minerals is removed. This is equal to the 'undeveloped market value of the interest' which is therefore excluded as qualifying expenditure¹.

The 'undeveloped market value of the interest' is defined² as the amount that the interest might reasonably be expected to fetch on a sale in the open market at the time it is acquired, given certain assumptions. Those assumptions are that³:

1. Ìý

   •ÌýÌýÌýÌý there is no source of mineral deposits on or in the land, and

2. Ìý

   •ÌýÌýÌýÌý it will only ever be lawful to carry out existing permitted development

Development is existing permitted development if at the time of the acquisition