|
| |
|
| |
| |
Relief in respect of decommissioning expenditure |
| |
Restriction of relief available in respect of decommissioning expenditure |
| |
1 | Part 8 of CTA 2010 (oil activities) is amended as follows. |
| |
2 | In section 330 (supplementary charge in respect of ring fence trades), at the |
| 5 |
end of subsection (2) insert— |
| |
| “See also sections 330A and 330B (which provide for the amount of |
| |
adjusted ring fence profits to be further adjusted where |
| |
decommissioning expenditure has been taken into account).” |
| |
3 | After section 330 insert— |
| 10 |
“330A | Decommissioning expenditure taken into account in calculating ring |
| |
| |
(1) | This section applies where— |
| |
(a) | any decommissioning expenditure is taken into account in |
| |
calculating the amount mentioned in paragraph (a) of |
| 15 |
subsection (3) of section 330 or the amount mentioned in |
| |
paragraph (b) of that subsection, and |
| |
(b) | if that expenditure were not so taken into account, the |
| |
amount of the adjusted ring fence profits of the company for |
| |
the accounting period would be greater than nil. |
| 20 |
(2) | In calculating for the purposes of section 330(1) the amount of the |
| |
adjusted ring fence profits of the company for the accounting period, |
| |
there is to be added an amount equal to the appropriate fraction of |
| |
the used-up amount of that expenditure. |
| |
(3) | For the purposes of this section— |
| 25 |
“the appropriate fraction” is![equation: id[over[plus[times[char[S],char[C]],minus[times[num[20.0000000000000000,"20"],string[
"%"]]]],times[char[S],char[C]]]]](missing.gif) |
| |
where SC is the percentage specified in section 330(1) for the |
| |
| |
“the used-up amount”, in relation to any expenditure, is the |
| |
| 30 |
(a) | the adjusted ring fence profits of the company for the |
| |
accounting period determined in the absence of this |
| |
section (which may be nil), and |
| |
(b) | what the adjusted ring fence profits of the company |
| |
for that accounting period would be if that |
| 35 |
expenditure were not taken into account as |
| |
mentioned in subsection (1). |
| |
(4) | In determining for the purposes of this section whether, and to what |
| |
extent, any losses which have been taken into account as mentioned |
| |
in subsection (1) are attributable to decommissioning expenditure— |
| 40 |
(a) | assume that any amounts of any other expenditure which |
| |
could be taken into account in calculating those losses are |
| |
|
| |
|
| |
|
taken into account before any amounts of decommissioning |
| |
| |
(b) | where any losses have been surrendered in accordance with |
| |
Part 5, the company must specify, in accordance with a basis |
| |
determined jointly by the company, the surrendering |
| 5 |
company (if different) and any other claimant company, |
| |
whether any of those losses is attributable to |
| |
decommissioning expenditure. |
| |
(5) | But if paragraph (a) of subsection (4) would work unfavourably in |
| |
the company’s case, the company may elect for that paragraph not to |
| 10 |
apply in relation to it and for any amounts of expenditure which |
| |
could be taken into account in calculating those losses instead to be |
| |
taken into account in the order specified in the election. |
| |
(6) | In determining for the purposes of this section the used-up amount |
| |
of decommissioning expenditure, assume that any other amounts |
| 15 |
that could be deducted in calculating the adjusted ring fence profits |
| |
of the company for the accounting period have already been so |
| |
| |
(7) | But if subsection (6) would work unfavourably in the company’s |
| |
case, the company may elect for that subsection not to apply in |
| 20 |
relation to it and for any amounts that could be deducted in |
| |
calculating those adjusted ring fence profits instead to be deducted |
| |
in the order specified in the election. |
| |
(8) | For the purposes of this section, any deduction made under section |
| |
330B is to be disregarded. |
| 25 |
(9) | This section does not apply in relation to any accounting period for |
| |
which the percentage specified in section 330(1) is less than or equal |
| |
to 20% (including any accounting period beginning before 24 March |
| |
2011 and ending on or after that date). |
| |
| 30 |
“claimant company” and “surrendering company” are to be |
| |
read in accordance with Part 5 (see section 188), and |
| |
“decommissioning expenditure” has the meaning given by |
| |
| |
330B | Decommissioning expenditure taken into account for PRT purposes |
| 35 |
(1) | This section applies where— |
| |
(a) | any decommissioning expenditure is taken into account in |
| |
calculating the assessable profit accruing to a participator in |
| |
any chargeable period from an oil field, and |
| |
(b) | if that expenditure were not so taken into account, the |
| 40 |
amount of petroleum revenue tax with which the participator |
| |
would be chargeable in respect of the field for the chargeable |
| |
period would be greater than nil. |
| |
(2) | In calculating for the purposes of section 330(1) the amount of the |
| |
participator’s adjusted ring fence profits for the relevant accounting |
| 45 |
period, there is to be deducted an amount equal to the appropriate |
| |
fraction of the PRT difference. |
| |
(3) | For the purposes of this section— |
| |
|
| |
|
| |
|
“the appropriate fraction” is![equation: id[over[plus[times[char[S],char[C]],minus[times[num[20.0000000000000000,"20"],string[
"%"]]]],times[char[S],char[C]]]]](missing.gif) |
| |
where SC is the percentage specified in section 330(1) for the |
| |
relevant accounting period, and |
| |
“the PRT difference” is the difference between— |
| |
(a) | the amount of petroleum revenue tax with which the |
| 5 |
participator is chargeable for the chargeable period |
| |
| |
(b) | the amount of petroleum revenue tax with which the |
| |
participator would be chargeable for that chargeable |
| |
period if the decommissioning expenditure were not |
| 10 |
taken into account as mentioned in subsection (1). |
| |
(4) | In determining for the purposes of this section whether, and to what |
| |
extent, any allowable losses which have been taken into account as |
| |
mentioned in subsection (1) are attributable to decommissioning |
| |
expenditure, assume that any amounts of any other expenditure |
| 15 |
which could be taken into account in calculating those losses are |
| |
taken into account before any amounts of decommissioning |
| |
| |
(5) | But if subsection (4) would work unfavourably in the participator’s |
| |
case, the participator may elect for that subsection not to apply in |
| 20 |
relation to it and for any amounts of expenditure which could be |
| |
taken into account in calculating those losses instead to be taken into |
| |
account in the order specified in the election. |
| |
(6) | This section does not apply in relation to any accounting period for |
| |
which the percentage specified in section 330(1) is less than or equal |
| 25 |
to 20% (including any accounting period beginning before 24 March |
| |
2011 and ending on or after that date). |
| |
| |
“assessable profit” and “allowable loss” have the same meaning |
| |
as in Part 1 of OTA 1975 (see section 2 of that Act), |
| 30 |
“decommissioning expenditure” has the meaning given by |
| |
| |
“the relevant accounting period”— |
| |
(a) | in a case where section 301 applies, is to be construed |
| |
in accordance with subsection (7) of that section, and |
| 35 |
(b) | in any other case, means the accounting period for |
| |
which a deduction in respect of any petroleum |
| |
revenue tax with which the participator may be |
| |
chargeable for the chargeable period mentioned in |
| |
subsection (1) would be made under section 299(2) |
| 40 |
(deduction of PRT in calculating income for |
| |
corporation tax purposes). |
| |
330C | Meaning of “decommissioning expenditure” |
| |
(1) | In sections 330A and 330B “decommissioning expenditure” means |
| |
expenditure incurred in connection with— |
| 45 |
(a) | demolishing any plant or machinery, |
| |
|
| |
|
| |
|
(b) | preserving any plant or machinery pending its reuse or |
| |
| |
(c) | preparing any plant or machinery for reuse, |
| |
(d) | arranging for the reuse of any plant or machinery, or |
| |
(e) | the restoration of any land. |
| 5 |
(2) | It is immaterial for the purposes of subsection (1)(b) whether the |
| |
plant or machinery is reused, is demolished or is partly reused and |
| |
| |
(3) | It is immaterial for the purposes of subsection (1)(c) and (d) whether |
| |
the plant or machinery is in fact reused. |
| 10 |
(4) | In subsection (1)(e) “restoration” includes landscaping. |
| |
(5) | The Treasury may by order amend this section. |
| |
(6) | An order under subsection (5) may include transitional provision |
| |
| |
4 | In section 7 of FA 2011 (increase in rate of supplementary charge), in |
| 15 |
subsection (6), at the end insert— |
| |
| “See also sections 330A and 330B of CTA 2010 (which have effect in |
| |
relation to the separate accounting period consisting of so much of |
| |
the straddling period as falls on or after 24 March 2011).” |
| |
Extension of loss relief available in respect of decommissioning expenditure |
| 20 |
5 (1) | In Chapter 2 of Part 4 of CTA 2010 (relief for trade losses), section 40 (ring |
| |
fence trades: extension of periods for which relief may be given) is amended |
| |
| |
(2) | In subsection (1)(b), for the words from “for which” to the end substitute “for |
| |
which any allowances under section 164 or 403 of CAA 2001 are made to the |
| 25 |
company in respect of decommissioning expenditure”. |
| |
| |
(a) | for “the allowance” substitute “the sum of the allowances”, and |
| |
(b) | for “that allowance” substitute “that amount”. |
| |
(4) | After that subsection insert— |
| 30 |
“(3A) | In this section “decommissioning expenditure” has the meaning |
| |
| |
| |
6 (1) | The amendments made by this Schedule have effect in relation to |
| |
expenditure incurred in connection with decommissioning carried out on or |
| 35 |
| |
(2) | In sub-paragraph (1) “decommissioning” means anything falling within any |
| |
of paragraphs (a) to (e) of section 330C(1) of CTA 2010 (as inserted by this |
| |
| |
|
| |
|