(7) Paragraph 74 of Schedule 18 to FA 1998 (company tax returns etc:
time limit for claims for group relief) applies in relation to a claim for
pre-commencement additional supplement as it applies in relation to
a claim for group relief.

329J 5The mixed pool of qualifying pre-commencement onshore
expenditure and supplement previously allowed

(1) For the purpose of determining the amount of any pre-
commencement additional supplement, a qualifying company is to
be taken to have had, at all times in the pre-commencement periods
10of the company, a continuing mixed pool of—

(a) qualifying pre-commencement onshore expenditure,

(b) pre-commencement supplement under Chapter 5, and

(c) pre-commencement additional supplement under this
Chapter.

(2) 15The pool is to be taken to have consisted of—

(a) the company’s qualifying pre-commencement onshore
expenditure, allocated to the pool for each pre-
commencement period in accordance with subsection (3),

(b) the company’s pre-commencement supplement allowed
20under Chapter 5, allocated to the pool in accordance with
subsections (4) to (7), and

(c) the company’s pre-commencement additional supplement
allowed under this Chapter, allocated to the pool in
accordance with subsection (8).

(3) 25To allocate qualifying pre-commencement onshore expenditure to
the pool for any pre-commencement period, take the following
steps—

Step 1

Count as eligible expenditure for that period so much of the
30qualifying pre-commencement onshore expenditure mentioned in
section 329I(1) as was incurred in that period.

Step 2

Find the total of all the eligible expenditure for that period (amount
E).

35Step 3

If section 329K (reduction in respect of disposal receipts under CAA
2001) applies, reduce amount E in accordance with that section.

Step 4

If section 329L (reduction in respect of unrelieved group ring fence
40profits) applies, reduce (or, as the case may be, further reduce)
amount E in accordance with that section.

And so much of amount E as remains after making those reductions
is to be taken to have been added to the pool in that period.

And so much of amount E as remains after making those reductions
45is to be taken to have been added to the pool in that period.

(4) If any pre-commencement supplement is allowed on a claim under
Chapter 5 in respect of a pre-commencement period, the appropriate
proportion of that supplement is to be taken to have been added to
the pool in that period.

(5) 50“The appropriate proportion” means—

(a) if, before the end of the pre-commencement period, the
company has incurred qualifying pre-commencement
expenditure (within the meaning of section 312) on offshore
oil-related activities, such proportion of the pre-
5commencement supplement under Chapter 5 as it is just and
reasonable to attribute (directly or indirectly) to the
company’s qualifying pre-commencement onshore
expenditure, and

(b) in any other case, 100%.

(6) 10In the case of a straddling period—

(a) the appropriate proportion of the pre-commencement
supplement allowed on a claim under Chapter 5 in respect of
the period is apportioned between so much of that period as
falls before 5 December 2013 and so much of it as falls on or
15after that date, on the basis of the number of days in each part,
and

(b) only so much of the appropriate proportion of the
supplement as is apportioned to the later period is taken to
have been added to the pool under subsection (4).

(7) 20But if the basis of the apportionment in subsection (6)(a) would work
unjustly or unreasonably in the company’s case, the company may
elect for the apportionment to be made on another basis that is just
and reasonable and specified in the election.

(8) If any pre-commencement additional supplement is allowed on a
25claim under this Chapter in respect of a pre-commencement period,
the amount of that supplement is to be taken to have been added to
the pool in that period.

329K Reduction in respect of disposal receipts under CAA 2001

(1) This section applies in the case of the qualifying company if—

(a) 30it incurs qualifying pre-commencement onshore expenditure
in respect of a ring fence trade in any pre-commencement
period,

(b) it would, on the relevant assumption, be entitled to an
allowance under any provision of CAA 2001 in respect of that
35expenditure,

(c) an event occurs in relation to any asset representing the
expenditure in any pre-commencement period, and

(d) the event would, on the relevant assumption, require a
disposal value to be brought into account under any
40provision of CAA 2001 for any pre-commencement period.

(2) The relevant assumption is that the company was carrying on the
ring fence trade—

(a) when the expenditure was incurred, and

(b) when the event giving rise to the disposal value occurred.

(3) 45For the purpose of allocating qualifying pre-commencement onshore
expenditure to the pool for each pre-commencement period—

(a) find the total amount of the disposal values in the case of all
such events (amount D), and

(b) taking later periods before earlier periods, reduce (but not
below nil) amount E for any pre-commencement period by
setting against it so much of amount D as does not fall to be
set against amount E for a later pre-commencement period.

(4) 5Where the asset represented by the qualifying pre-commencement
onshore expenditure is a mixed-activities asset, subsection (3)
applies as if the disposal value required to be brought into account
as mentioned in subsection (1)(d) were such proportion of the actual
disposal value as is just and reasonable having regard to that
10expenditure.

(5) The asset is a “mixed-activities asset” if it also represents expenditure
on offshore oil-related activities which is incurred by the company in
a pre-commencement period and in respect of which the company
would, on the relevant assumption, be entitled to an allowance
15under any provision of CAA 2001.

329L Reduction in respect of unrelieved group ring fence profits

(1) This section applies if there is an amount of unrelieved group ring
fence profits for a pre-commencement period.

(2) For the purpose of allocating qualifying pre-commencement onshore
20expenditure to the pool for that period—

(a) find so much (if any) of amount E for that period as remains
after any reduction falling to be made under section 329K
(“the amount of the net onshore expenditure”), and

(b) reduce the amount of the net onshore expenditure (but not
25below nil) by setting against it a sum equal to the aggregate
of the amounts of unrelieved group ring fence profits for the
period.

(3) If the pre-commencement period is a straddling period, the
unrelieved group ring fence profits for that period are to be
30determined as if the period began on 5 December 2013 and ended at
the same time as the straddling period.

(4) Subsection (5) applies where in the pre-commencement period the
company carries on both onshore oil-related activities and offshore
oil related activities.

(5) 35The sum to be set against the net onshore expenditure under
subsection (2)(b) is first to be reduced (but not below nil) by the
amount of the company’s net offshore expenditure for the period.

(6) “The net offshore expenditure” of the company for the period is
determined as follows—

40Step 1

Determine the amount of the company’s total pre-commencement
offshore expenditure incurred in the period.

Step 2

Make any reduction in that amount required by subsection (9).

45So much as remains is the net offshore expenditure of the company
for the period.

So much as remains is the net offshore expenditure of the company
for the period.

(7) “Pre-commencement offshore expenditure” means expenditure
which—

(a) is incurred in the course of oil extraction activities which are
offshore oil-related activities, and

(b) 5meets Conditions A, C and D in section 329G.

(8) Subsection (9) applies if—

(a) the qualifying company incurs pre-commencement offshore
expenditure in respect of a ring fence trade in any pre-
commencement period,

(b) 10it would, on the relevant assumption in section 329K, be
entitled to an allowance under any provision of CAA 2001 in
respect of that expenditure,

(c) an event occurs in relation to any asset representing the
expenditure in any pre-commencement period, and

(d) 15the event would, on that assumption, require a disposal value
to be brought into account under any provision of CAA 2001
for any pre-commencement period.

(9) For the purposes of Step 2 in subsection (6)—

(a) find the total amount of the disposal values in the case of all
20such events (amount D), and

(b) taking later periods before earlier periods, reduce (but not
below nil) the amount of pre-commencement offshore
expenditure for any pre-commencement period by setting
against it so much of amount D as does not fall to be set
25against that total for a later pre-commencement period.

(10) Where the asset represented by the pre-commencement offshore
expenditure is a mixed-activities asset, subsection (9) applies as if the
disposal value required to be brought into account as mentioned in
subsection (8)(d) were such proportion of the actual disposal value
30as is just and reasonable having regard to that expenditure.

(11) The asset is a “mixed-activities asset” if it also represents expenditure
on onshore oil-related activities which is incurred by the company in
a pre-commencement period and in respect of which the company
would, on the relevant assumption in section 329K, be entitled to an
35allowance under any provision of CAA 2001.

329M The reference amount for a pre-commencement period

For the purposes of section 329I, the reference amount for a pre-
commencement period is the amount in the pool at the end of the
period—

(a) 40after the addition to the pool of any qualifying pre-
commencement onshore expenditure allocated to the pool for
that period in accordance with section 329J(3), but

(b) before determining, and adding to the pool, the amount of
any pre-commencement additional supplement claimed in
45respect of the period under this Chapter.

Post-commencement additional supplement

329N Supplement in respect of post-commencement period

(1) A qualifying company which incurs an onshore ring fence loss (see
section 329P) in any post-commencement period may claim
5supplement under this section (“post-commencement additional
supplement”) in respect of—

(a) that period, or

(b) any subsequent accounting period in which it carries on its
ring fence trade.

(2) 10Any post-commencement additional supplement allowed on a claim
in respect of a post-commencement period is to be treated for the
purposes of the Corporation Tax Acts (other than the post-
commencement additional supplement provisions) as if it were a
loss—

(a) 15which is incurred in carrying on the ring fence trade in that
period, and

(b) which falls in whole to be used under section 45 (carry
forward of trade loss against subsequent trade profits) to
reduce trading income from the ring fence trade in
20succeeding accounting periods.

(3) Paragraph 74 of Schedule 18 to FA 1998 (company tax returns etc:
time limit for claims for group relief) applies in relation to a claim for
post-commencement additional supplement as it applies in relation
to a claim for group relief.

(4) 25In this Chapter “the post-commencement additional supplement
provisions” means this section and sections 329O to 329T.

329O Amount of post-commencement additional supplement for a post-
commencement period

(1) The amount of the post-commencement additional supplement for
30any post-commencement period in respect of which a claim under
section 329N is made is the relevant percentage for that period of the
reference amount for that period.

(2) Sections 329P to 329T have effect for the purpose of determining the
reference amount for a post-commencement period.

(3) 35If the post-commencement period is a period of less than 12 months,
the amount of the post-commencement additional supplement for
the period (apart from this subsection) is to be reduced
proportionally.

329P Onshore ring fence losses

(1) 40If—

(a) in a post-commencement period (“the period of the loss”) a
qualifying company carrying on a ring fence trade consisting
solely of onshore oil-related activities incurs a loss in the
trade, and

(b) 45some or all of the loss falls to be used under section 45 (carry
forward of trade loss against subsequent profits) to reduce

trading income from the trade in succeeding accounting
periods,

so much of the loss as falls to be so used is an “onshore ring fence
loss” of the company.

5This is subject to subsection (4).

This is subject to subsection (4).

(2) If—

(a) in a post-commencement period (“the period of the loss”) a
qualifying company carrying on a ring fence trade consisting
10of both onshore oil-related activities and offshore oil-related
activities incurs a loss in the trade, and

(b) some or all of the loss falls to be used under section 45 (carry
forward of trade loss against subsequent profits) to reduce
trading income from the trade in succeeding accounting
15periods,

the appropriate proportion of so much of the loss as falls to be so
used is an “onshore ring fence loss” of the company.

This is subject to subsection (4).

This is subject to subsection (4).

(3) 20“The appropriate proportion” means such proportion as it is just and
reasonable to attribute to the company’s onshore oil-related
activities carried out in the course of its ring fence trade.

(4) In the case of a straddling period—

(a) the amount of the onshore ring fence loss determined under
25subsection (1) or (2) in respect of the period is apportioned
between so much of that period as falls before 5 December
2013 and so much of it as falls on or after that date, on the
basis of the number of days in each part, and

(b) only so much of the loss as is apportioned to the later part of
30the period is an onshore ring fence loss of the company for
the straddling period.

(5) But if the basis of the apportionment in subsection (4)(a) would work
unjustly or unreasonably in the company’s case, the company may
elect for the apportionment to be made on another basis that is just
35and reasonable and specified in the election.

(6) In determining for the purposes of the post-commencement
additional supplement provisions how much of a loss incurred in a
ring fence trade falls to be used as mentioned in subsection (1)(b) or
(2)(b), the following assumptions are to be made.

(7) 40The first assumption is that every claim is made that could be made
by the company under section 37 (relief for trade losses against total
profits) to deduct losses incurred in the ring fence trade from ring
fence profits of post-commencement periods which are earlier than
the period of the loss.

(8) 45The second assumption is that (where appropriate) section 42 (ring
fence trades: further extension of period for relief) applies in relation
to every such claim under section 37.

(9) This section has effect for the purposes of the post-commencement
additional supplement provisions.

329Q The onshore ring fence pool

(1) For the purpose of determining the amount of any post-
commencement additional supplement, a qualifying company is to
be taken at all times in its post-commencement periods to have a
5continuing mixed pool (the “onshore ring fence pool”) of—

(a) the company’s onshore ring fence losses,

(b) post-commencement supplement under Chapter 5,

(c) post-commencement additional supplement under this
Chapter.

(2) 10The onshore ring fence pool continues even if the amount in it is nil.

(3) The onshore ring fence pool consists of—

(a) the company’s onshore ring fence losses, allocated to the pool
in accordance with subsection (4)(a),

(b) the company’s post-commencement supplement allowed
15under Chapter 5, allocated to the pool in accordance with
subsections (4)(b) and (5) to (7), and

(c) the company’s post-commencement additional supplement
allowed under this Chapter, allocated to the pool in
accordance with subsection (4)(c).

(4) 20The allocation to the pool is made as follows—

(a) the amount of an onshore ring fence loss is added to the pool
in the period of the loss,

(b) if any post-commencement supplement is allowed on a claim
under Chapter 5 in respect of a post-commencement period,
25the appropriate proportion of the amount of that supplement
is added to the pool in that period, and

(c) if any post-commencement additional supplement is allowed
on a claim under this Chapter in respect of a post-
commencement period, the amount of that supplement is
30added to the pool in that period.

(5) “The appropriate proportion” is—

(a) if the ring fence trade carried on by the company includes, or
has at any time included, offshore oil-related activities, such
proportion of the supplement as it is just and reasonable to
35attribute (directly or indirectly) to the company’s onshore oil-
related activities carried on in the period for which the
supplement is allowed or an earlier post-commencement
period, and

(b) in any other case, 100%.

(6) 40In the case of a straddling period—

(a) the appropriate proportion of the post-commencement
supplement allowed on a claim under Chapter 5 in respect of
the period is apportioned between so much of that period as
falls before 5 December 2013 and so much of it as falls on or
45after that date, on the basis of the number of days in each part,
and

(b) only so much of the appropriate proportion of the
supplement as is apportioned to the later period is added to
the pool under subsection (4)(b).

(7) But if the basis of the apportionment in subsection (6)(a) would work
unjustly or unreasonably in the company’s case, the company may
elect for the apportionment to be made on another basis that is just
and reasonable and specified in the election

(8) 5The amount in the onshore ring fence pool is subject to reductions in
accordance with the following provisions of this Chapter.

(9) If a reduction in the amount in the onshore ring fence pool falls to be
made in any accounting period, the reduction is made—

(a) after the addition to the pool of—

(i) 10the amount of any onshore ring fence losses allocated
to the pool in that period in accordance with
subsection (4)(a), and

(ii) any amount of post-commencement supplement
under Chapter 5 claimed in respect of the period and
15allocated to the pool in accordance with subsection
(4)(b), but

(b) before determining and adding to the pool under subsection
(4)(c) the amount of any post-commencement additional
supplement under this Chapter claimed in respect of the
20period,

and references to the amount in the pool are to be read accordingly.

329R Reductions in respect of utilised onshore ring fence losses

(1) If one or more losses incurred by a qualifying company in its ring
fence trade in a post-commencement period are used under section
2545 (carry forward of trade loss against subsequent trade profits) to
reduce any profits of a post-commencement period, a reduction is to
be made in that period in accordance with this section.

(2) To the extent that the losses used as mentioned in subsection (1) are
onshore ring fence losses, the amount in the onshore ring fence pool
30is to be reduced (but not below nil) by setting against it a sum equal
to such amount of those onshore ring fence losses as is so used.

(3) For the purposes of determining the extent to which losses used as
mentioned in subsection (1) are onshore ring fence losses, relevant
offshore losses are to be treated as so used in priority to onshore ring
35fence losses.

(4) For this purpose “relevant offshore loss” means so much (if any) of a
loss used as mentioned in subsection (1) as is given by—

(5) In the case of a loss incurred in a straddling period—

(a) the amount of the relevant offshore loss is apportioned
45between so much of that period as falls before 5 December
2013 and so much of it as falls on or after that date, on the
basis of the number of days in each part, and

(b) only so much of the loss as is apportioned to the later part of
the period is a relevant offshore loss of the company for the
straddling period.

(6) But if the basis of the apportionment in subsection (5)(a) would work
5unjustly or unreasonably in the company’s case, the company may
elect for the apportionment to be made on another basis that is just
and reasonable and specified in the election.

329S Reductions in respect of unrelieved group ring fence profits

(1) If there is an amount of unrelieved group ring fence profits for a post-
10commencement period, reductions are to be made in that period in
accordance with this section.

(2) After making any reductions that fall to be made in accordance with
section 329R, the remaining amount in the onshore ring fence pool is
to be reduced (but not below nil) by setting against it a sum equal to
15the aggregate of the amounts of unrelieved group ring fence profits
for the period.

This is subject to subsection (4).

This is subject to subsection (4).

(3) If the post-commencement period is a straddling period, the
20unrelieved group ring fence profits for that period are to be
determined as if the period began on 5 December 2013 and ended at
the same time as the straddling period.

(4) If the ring fence trade carried on by the company includes, or has at
any time included, offshore oil-related activities, the sum to be set
25against the onshore ring fence pool under subsection (2) is first to be
reduced by the notional offshore loss pool.

(5) “The notional offshore loss pool” means—

(a) the sum of the relevant offshore losses (see section 329R(4))
for the post-commencement period mentioned in subsection
30(1) and earlier post-commencement periods, less

(b) the sum of—

(i) so much of those losses as is to be treated (see section
329R(3)) as used as mentioned in section 329R, and

(ii) any reductions previously made under subsection (2)
35of this section.

329T The reference amount for a post-commencement period

For the purposes of section 329O the reference amount for a post-
commencement period is so much of the amount in the onshore ring
fence pool as remains after making any reductions required by
40sections 329R and 329S.”

2 In section 270 of CTA 2010 (overview of Part 8), after subsection (5) insert—

“(5A) Chapter 5A makes provision about onshore additional ring fence
expenditure supplement.”

3 In Schedule 4 to CTA 2010 (index of defined expressions), at the appropriate

place insert—

4 The amendments made by this Schedule have effect in relation to accounting
periods ending on or after 5 December 2013.