Finance Bill

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Session 2007 - 08
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Finance Bill

Finance Bill (Volume II)
Schedule 33 — PRT: elections for oil fields to become non-taxable
Part 1 — New Schedule 20A to FA 1993
374

(a)
information that the responsible person gave the
Commissioners in connection with the election was
inaccurate or incomplete at the time it was given, and
(b)
if the information had not been inaccurate or incomplete,
the Commissioners would not have made the decision that
they made under paragraph 2.
      (2)
For the purposes of sub-paragraph (1) it does not matter whether
or not the Commissioners required the information to be given.
7     (1)
If the Commissioners cancel an election, they must give notice of
the cancellation—
(a)
to the person who made the election, or
(b)
if it is impracticable to give notice to that person, to a
person who is a participator at the time the election is
cancelled, or
(c)
if it is impracticable to give notice to any such person, to a
person who is a former participator at the time the election
is cancelled;

but the Commissioners are not required to give notice to a person
falling within paragraph (c) if it would be impracticable to give
notice to any such person.
      (2)
Within one month of being given notice by the Commissioners
under sub-paragraph (1), the person must give copies of the notice
to each person who is a participator, or a former participator, at
the time the Commissioners’ notice is given.
      (3)
But that person is not required to give notice to any person to
whom it would be impracticable to give notice.
Effect of cancellation
8     (1)
If the Commissioners cancel an election under paragraph 6, the
election is to be treated as though it had never had effect.
      (2)
But that does not make a person liable for anything that the person
did, or did not do, in consequence of the election having effect
before its cancellation.
      (3)
If the Commissioners cancel an election, the enactments relating to
petroleum revenue tax apply to the oil field subject to sub-
paragraphs (4) to (7).
      (4)
The Commissioners may specify the periods within which PRT
returns for the relevant chargeable periods must be delivered.
      (5)
If the Commissioners specify the period within which a PRT
return must be delivered, the provisions of OTA 1975 set out in
sub-paragraph (6) apply to the specified period as if it were a
period for the delivery of a PRT return that has been extended
under paragraph 2 or 5 of Schedule 2 to OTA 1975.
      (6)
The provisions of OTA 1975 referred to in sub-paragraph (5) are—
(a)
paragraph 12A of Schedule 2, and

Finance Bill (Volume II)
Schedule 33 — PRT: elections for oil fields to become non-taxable
Part 1 — New Schedule 20A to FA 1993
375

(b)
paragraph 2(7) and (8) of Schedule 5 (including those
provisions as applied to Schedule 6 to OTA 1975 by
paragraph 2 of Schedule 6).
      (7)
For the purposes of paragraph 4 of Schedule 2 to OTA 1975, the
“initial period” is the period of thirty days beginning with the date
on which the Commissioners give notice in accordance with
paragraph 6 of this Schedule.
      (8)
The Commissioners may by regulations make transitional
provision (including provision modifying enactments) applicable
to cases where elections are made and subsequently cancelled
under this Schedule.
      (9)
Regulations under sub-paragraph (8)—
(a)
are to be made by statutory instrument, and
(b)
are subject to annulment in pursuance of a resolution of the
House of Commons.
     (10)
In this paragraph—
“PRT return” means a return under paragraph 2 or 5 of
Schedule 2 to OTA 1975;
“relevant chargeable periods”, in relation to a cancelled
election, means the series of consecutive chargeable
periods that—
(a)
begins with the chargeable period from the start of
which the election had effect, and
(b)
ends with the chargeable period during which the
election is cancelled.
Appeals
9     (1)
The responsible person may appeal against a decision of the
Commissioners under paragraph 2(1).
      (2)
Any such appeal must be made within 3 months of the
Commissioners giving notice under paragraph 3 of their decision
to the responsible person.
10    (1)
A person who is a participator, or a former participator, at the time
the Commissioners cancel an election under paragraph 6 may
appeal against the cancellation.
      (2)
Any such appeal must be made within 3 months of the
Commissioners giving notice under paragraph 7 of the
cancellation (whether or not the notice was given to the person
making the appeal).
11    (1)
Any appeal under paragraph 9 or 10 must be made to the
Commissioners—
(a)
by notice in writing, or
(b)
in any other form authorised by direction of the
Commissioners.
      (2)
Any appeal under paragraph 9 or 10 is to be determined by the
Special Commissioners.

Finance Bill (Volume II)
Schedule 33 — PRT: elections for oil fields to become non-taxable
Part 2 — Other amendments
376

Interpretation
12    (1)
In this Schedule—
“Commissioners” means the Commissioners for Her
Majesty’s Revenue and Customs (except in the expression
“Special Commissioners”);
“election” means an election in writing, or in any other form
authorised by direction of the Commissioners, made to the
Commissioners;
“former participator”, in relation to a particular time, means
a person who—
(a)
is not a participator in the chargeable period which
includes that time, but
(b)
was a participator in any earlier chargeable period;
“OTA 1975” means the Oil Taxation Act 1975;
“participator”, in relation to a particular time, means a person
who is a participator in the chargeable period which
includes that time.
      (2)
Expressions used in this Schedule and in Part 1 of OTA 1975 have
the same meaning in this Schedule as in that Part of OTA 1975.”
Part 2
Other amendments
OTA 1975
2
In section 6 of OTA 1975 (allowances of unrelievable loss from abandoned
field), in subsection (1A), after “this Act” insert “and paragraph 5 of
Schedule 20A to the Finance Act 1993”.
FA 1980
3
In Schedule 17 to FA 1980 (transfers of interests in oil fields), in paragraph
15 (terminal losses), after sub-paragraph (9) insert—
   “(9A)
This paragraph is subject to paragraph 5 of Schedule 20A to the
Finance Act 1993.”
Oil Taxation Act 1983
4
In section 9 of the Oil Taxation Act 1983 (c. 56) (tariff receipts allowance), in
subsection (5)(a), for the words from “other than” to the end substitute
“other than—
(i)
the principal field, or
(ii)
an oil field that is a non-taxable field by virtue of
section 185(1) or (1A) of the Finance Act 1993.”

Finance Bill (Volume II)
Schedule 34 — Oil decommmissioning expenditure: consequential amendments
377

Schedule 34
Section 107

Oil decommmissioning expenditure: consequential amendments
ICTA
1
In section 393A of ICTA (losses: set off against profits), in subsections (2C)(b)
and (11)(a), for “abandonment expenditure” substitute “general
decommissioning expenditure”.
CAA 2001
2
CAA 2001 is amended as follows.
3
In section 26 (demolition costs), in subsection (5), for “abandonment
expenditure” substitute “general decommissioning expenditure”.
4
In section 57 (available qualifying expenditure), in the entry in subsection (2)
relating to section 165(3) of CAA 2001, for “abandonment expenditure”
substitute “general decommissioning expenditure”.
5     (1)
Section 164 (abandonment expenditure incurred before cessation of ring
fence trade) is amended as follows.
      (2)
In the title, for “abandonment expenditure” substitute “general
decommissioning expenditure”.
      (3)
In subsections (1), (2)(a), (3)(a), (4)(a) and (5), for “abandonment
expenditure” substitute “general decommissioning expenditure”.
6     (1)
Section 165 (abandonment expenditure within 3 years of ceasing ring fence
trade) is amended as follows.
      (2)
In the title, for “abandonment expenditure” substitute “general
decommissioning expenditure”.
      (3)
In subsection (1)(b) and (c), for “abandonment expenditure” substitute
“general decommissioning expenditure”.
      (4)
In subsection (3)—
(a)
in paragraph (a), for “relevant abandonment cost” substitute
“relevant decommissioning cost”, and
(b)
in paragraph (b), for “abandonment expenditure” substitute “general
decommissioning expenditure”.
      (5)
In subsection (4), in the definition of “the relevant abandonment cost”—
(a)
for “relevant abandonment cost” substitute “relevant
decommissioning cost”, and
(b)
for “abandonment expenditure” in each place substitute “general
decommissioning expenditure”.