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(1) | Section 79 of FA 1986 (stamp duty and loan capital) is amended as follows. |
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(2) | In subsection (6), for “subsection (7)” substitute “subsections (7) to (7B)”. |
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(3) | After subsection (7A) insert— |
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“(7B) | Subsection (4) shall not be prevented from applying to a capital market |
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instrument by virtue of subsection (6)(b) by reason only that the capital |
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market investment concerned carries or has carried a right to interest |
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which ceases or reduces if, or to the extent that, the issuer, after meeting |
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or providing for other obligations specified in the capital market |
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arrangement concerned, has insufficient funds available from that |
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capital market arrangement to pay all or part of the interest otherwise |
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(4) | After subsection (12) insert— |
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“capital market instrument” means an instrument transferring a |
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capital market investment issued as part of a capital market |
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“capital market investment” and “capital market arrangement” |
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have the same meaning as in section 72B of the Insolvency Act |
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1986 (see paragraphs 1 to 3 of Schedule 2A to that Act).” |
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(5) | The amendments made by this section have effect in relation to any instrument |
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executed on or after the day on which this Act is passed. |
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100 | Meaning of “participator” |
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(1) | In section 12 of OTA 1975 (interpretation of Part 1), the definition of |
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“participator” is amended as follows. |
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(2) | In the words before paragraph (a), after “chargeable period” insert “(“the |
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relevant chargeable period”)”. |
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(3) | In paragraphs (a), (b) and (c), for “that chargeable period” substitute “the |
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relevant chargeable period”. |
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(4) | At the end of paragraph (c) insert “and |
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(d) | a former participator to whom an amount is attributed |
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under paragraph 2A(2) of Schedule 5 in respect of a |
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default payment made in relation to the field in the |
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relevant chargeable period; and |
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(e) | a former participator to whom an amount was |
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attributed under paragraph 2A(2) of Schedule 5 in |
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respect of a default payment made in relation to the field |
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in either of the two chargeable periods preceding the |
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relevant chargeable period; and |
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(i) | made a default payment in relation to the field |
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(whether the person was then a current |
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participator or former participator), |
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(ii) | is not a participator during the relevant |
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chargeable period under any of paragraphs (a) to |
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(e) of this definition, and |
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(iii) | receives, in the relevant chargeable period, |
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reimbursement expenditure (within the |
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meaning of section 108(1)(c) of the Finance Act |
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1991) in respect of the default payment; and |
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(i) | made a default payment in relation to the field |
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(whether the person was then a current |
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participator or former participator), |
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(ii) | is not a participator during the relevant |
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chargeable period under any of paragraphs (a) to |
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(f) of this definition, and |
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(iii) | received, in either of the two chargeable periods |
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preceding the relevant chargeable period, |
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reimbursement expenditure (within the |
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meaning of section 108(1)(c) of the Finance Act |
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1991) in respect of the default payment; |
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| and for the purposes of paragraphs (f)(i) and (g)(i), |
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“current participator”, “former participator” and |
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“default payment” have the same meaning as in |
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paragraph 2A of Schedule 5;”. |
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(5) | The amendments made by this section have effect in relation to expenditure |
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incurred after 30 June 2008. |
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101 | Abandonment expenditure: default by participator met by former |
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(1) | In Schedule 5 to OTA 1975 (allowance of expenditure, other than abortive |
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exploration expenditure), for paragraph 2A substitute— |
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“2A (1) | This paragraph applies if— |
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(a) | a current participator (“the defaulter”) has defaulted on a |
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(i) | a relevant agreement, or |
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(ii) | an abandonment programme, |
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| to make a payment towards abandonment expenditure, and |
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(b) | a current or former participator (“the contributing |
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participator”) pays an amount in or towards meeting the |
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whole or part of the default (“a default payment”). |
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(2) | If a claim is made under this Schedule for the allowance of the |
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abandonment expenditure, the amount of the default payment is to |
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be attributed to the contributing participator for the purposes of |
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paragraphs 2(4)(b) and 3(1)(c). |
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(3) | But the amount attributed under sub-paragraph (2) may not |
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(a) | so much of the sum in default as the contributing participator |
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is required to meet in accordance with— |
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(i) | the relevant agreement, or |
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(ii) | the abandonment programme, or |
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(b) | such other amount as the participator may be required to |
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meet in accordance with a direction given under Part 4 of the |
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(4) | Sub-paragraph (2) is subject to paragraph 2B. |
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(5) | In determining the amount which is to be attributed to the |
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contributing participator under sub-paragraph (2), account shall be |
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taken of the whole of the defaulter’s interest in the relevant oil field. |
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(6) | But in determining the share of the abandonment expenditure to be |
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attributed to the defaulter under paragraph 2(4)(b), the amount |
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which would be attributed by reference to the defaulter’s interest in |
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the relevant oil field is to be reduced or (as the case may be) |
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extinguished by the deduction of the aggregate of— |
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(a) | the amount attributed to the contributing participator under |
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(b) | any other amounts attributed under sub-paragraph (2) to |
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other current or former participators who make default |
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payments in respect of the defaulter’s default. |
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2B (1) | No amount is to be attributed to a contributing participator under |
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paragraph 2A(2) unless the following conditions are all met. |
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(2) | The first condition is that the contributing participator is not |
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connected with the defaulter, applying section 839 of the Taxes Act |
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(connected persons) for the purposes of this sub-paragraph. |
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(3) | The second condition is that, at the end of the claim period for which |
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the claim is made, the defaulter still has an interest in the relevant oil |
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field which, under paragraph 2(4)(b), falls to be taken into account in |
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determining the shares in the abandonment expenditure. |
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(4) | The third condition is that the relevant participators have taken all |
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reasonable steps by way of legal remedy— |
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(a) | to secure that the defaulter meets the whole of the liability |
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referred to in paragraph 2A(1)(a), and |
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(b) | to enforce any guarantee or other security provided in |
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respect of that liability. |
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(5) | In sub-paragraph (4) “relevant participators” means— |
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(a) | each current participator (other than the defaulter), and |
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(b) | each former participator who makes a default payment in |
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respect of the defaulter’s default. |
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2C (1) | An amount attributed under paragraph 2A(2) is— |
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(a) | in the case of a current participator, to be an addition to the |
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share of the abandonment expenditure referable to the |
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current participator’s interest in the oil field, or |
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(b) | in the case of a former participator, to be the share of the |
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abandonment expenditure referable to the former |
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participator’s interest in the oil field. |
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(2) | In paragraphs 2A and 2B and this paragraph— |
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“abandonment expenditure” means expenditure which is |
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allowable for an oil field by virtue of section 3(1)(i) or (j); |
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“abandonment programme” means an abandonment |
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programme approved under Part 4 of the Petroleum Act 1998 |
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(including any such programme as revised); |
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“current participator” means a person who is, by virtue of |
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paragraph (a), (b) or (c) of the definition in section 12, a |
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participator in the relevant oil field in the chargeable period |
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in which the abandonment expenditure is incurred; |
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“former participator” means a person who— |
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(a) | is not a current participator, but |
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(b) | was, by virtue of paragraph (a), (b) or (c) of the |
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definition in section 12, a participator in the relevant |
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oil field in any chargeable period before the |
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chargeable period in which the abandonment |
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“relevant agreement” has the meaning given by section |
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104(5)(a) of the Finance Act 1991; |
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“relevant oil field” means the oil field to which the |
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abandonment expenditure relates; |
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“sum in default” means the amount of the payment which the |
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defaulter is liable to make as mentioned in paragraph |
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2A(1)(a), less the aggregate of— |
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(a) | so much of that payment as has been made by the |
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(b) | so much of that payment as has been met by virtue of |
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any guarantee or security provided in respect of the |
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(3) | For the purposes of paragraph 2A, a current participator is to be |
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regarded as defaulting on a liability to make a payment towards |
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abandonment expenditure if the following conditions are met. |
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(4) | The first condition is that the current participator has failed to make |
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the payment in full on the due day. |
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(5) | The second condition is that— |
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(a) | any of the payment remains unpaid on the sixtieth day after |
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(b) | before that sixtieth day, the current participator’s interest in |
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a relevant licence becomes liable under the relevant |
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agreement to be sold or forfeited, in whole or in part, by |
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reason of the failure to meet the liability. |
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(6) | In sub-paragraphs (4) and (5) “due day” means the day on which the |
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payment towards abandonment expenditure becomes due under the |
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relevant agreement or the abandonment programme.” |
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(2) | The amendment made by subsection (1) has effect in relation to expenditure |
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incurred after 30 June 2008. |
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