Gravel money

The traditional taxation of mineral royalties is still half income tax and half capital gains tax. Mineral royalties are not eligible for business asset taper relief which is significant from 6 April 2002 when full taper relief became available.

The review of the taxation of mineral royalties has become even more relevant with the introduction of aggregates levy from 1 April 2002.

One of the most common commercial minerals is gravel and there are a number of ways of trying to have the extraction taxed as efficiently as possible. Essentially capturing the monies as capital rather than income will be important.

Inclusive sale of land

If the owner were involved in a number of transactions whereby he sold the land and the gravel the sale could fall under the speculative transaction rules and be deemed to be an adventure in the nature of trade. The...