|
| |
| |
(a) | use in connection with an oil field that is not a taxable field, |
| |
| |
(b) | use for any other purpose (apart from a purpose falling |
| |
within section 3(1)(b) of the principal Act) of a separate |
| |
trade consisting of activities falling within section 492(1) of |
| 5 |
the Income and Corporation Taxes Act 1988. |
| |
(2C) | In sub-paragraphs (2A) and (2B) a reference to use in connection |
| |
with a taxable field or other oil field includes use giving rise to |
| |
receipts which, for the purposes of this Act, are tariff receipts.” |
| |
| 10 |
4 | The amendments made by this Part have effect in relation to chargeable |
| |
periods beginning after 30 June 2009. |
| |
| |
| |
General decommissioning expenditure |
| 15 |
5 (1) | Section 163 of CAA 2001 (meaning of “general decommissioning |
| |
expenditure”) is amended as follows. |
| |
(2) | In subsection (3)(a), after “use” insert “wholly or partly”. |
| |
(3) | In subsection (4ZA), for paragraphs (a) and (b) substitute— |
| |
“(a) | was not brought into use wholly for qualifying purposes, or |
| 20 |
(b) | has, at any time since it was brought into use, not been used |
| |
wholly for qualifying purposes.” |
| |
(4) | In subsection (4ZC), for “the purposes of the ring fence trade” substitute |
| |
| |
(5) | After subsection (4C) insert— |
| 25 |
“(4D) | In this section a reference to use for qualifying purposes is a reference |
| |
| |
(a) | use for the purposes of any ring fence trade of any person, or |
| |
| |
| 30 |
(ii) | the territorial sea of the United Kingdom, or |
| |
(iii) | an area designated under section 1(7) of the |
| |
Continental Shelf Act 1964, |
| |
| except use wholly or partly in connection with an oil field |
| |
(within the meaning given by section 12(2) of the Oil Taxation |
| 35 |
| |
6 | In section 165(4A) of CAA 2001 (general decommissioning expenditure after |
| |
ceasing ring fence trade), for “abandonment expenditure” substitute |
| |
“general decommissioning expenditure”. |
| |
| |
| |
|
| |
| |
| |
7 (1) | The amendments made by paragraph 5 have effect in relation to expenditure |
| |
incurred on or after 22 April 2009. |
| |
(2) | The amendment made by paragraph 6 has effect in relation to ring fence |
| |
trades that cease to be carried on or after 12 March 2008. |
| 5 |
| |
| |
PRT: former licensees and former oil fields |
| |
| |
Persons who cease to be licensees because of cessation events |
| |
1 | OTA 1975 is amended as follows. |
| 10 |
2 (1) | Section 12 (interpretation of Part 1) is amended as follows. |
| |
(2) | In subsection (1), in the definition of “participator”— |
| |
(a) | for “any”, in the first place, substitute “a”, |
| |
(b) | after that paragraph insert— |
| |
“(aa) | a person who is no longer a licensee in respect |
| 15 |
of any licensed area wholly or partly included |
| |
| |
(i) | was such a licensee at any time in any |
| |
chargeable period preceding the |
| |
relevant chargeable period, and |
| 20 |
(ii) | ceased to be such a licensee because of |
| |
| |
(c) | in paragraph (b), after “field” insert “(and who does not fall within |
| |
paragraph (aa) of this definition)”, |
| |
(d) | in paragraph (c), after “paragraph” insert “(aa) or”, and |
| 25 |
(e) | omit the words after paragraph (g). |
| |
(3) | After that subsection insert— |
| |
“(1A) | In the definition of “participator” in subsection (1)— |
| |
(a) | “cessation event”, in relation to an oil field to which a licence |
| |
relates, means any of the following— |
| 30 |
(i) | determination of the licence by the licensee, |
| |
(ii) | revocation of the licence by the Secretary of State or a |
| |
Northern Ireland Department, |
| |
(iii) | expiry of the licence at the end of its term, |
| |
(iv) | the licensed area ceasing to include any relevant area |
| 35 |
whatsoever, by reason of the licensee surrendering |
| |
the licence so far as it relates to the whole of the |
| |
| |
(v) | the licence ceasing to apply to the oil field by reason |
| |
of the operation of the licence; |
| 40 |
| |
| |
|
| |
| |
| and for the purposes of sub-paragraph (iv) “relevant area” |
| |
means an area which is, or combination of areas each of |
| |
which is, included in the oil field (whether or not such an area |
| |
falls partly outside the oil field); |
| |
(b) | “current participator”, “former participator” and “default |
| 5 |
payment” have the same meanings as in paragraph 2A of |
| |
| |
3 | In Schedule 5 (allowance of expenditure other than abortive exploration |
| |
expenditure), in paragraph 2C(2)— |
| |
(a) | in the definition of “current participator”, after paragraph “(a),” |
| 10 |
| |
(b) | in paragraph (b) of the definition of “former participator”, after |
| |
“paragraph (a),” insert “(aa),”. |
| |
4 | The amendments made by this Part have effect in relation to persons who |
| |
cease to be licensees because of cessation events occurring in chargeable |
| 15 |
periods that begin after 30 June 2009. |
| |
| |
Areas treated as continuing to be oil fields |
| |
5 | OTA 1975 is amended as follows. |
| |
6 | In section 12(1) (interpretation of Part 1), in the definition of “oil field”, after |
| 20 |
“this Act” insert “(which also includes provision about areas that are to be |
| |
treated as continuing to be oil fields)”. |
| |
7 (1) | Schedule 1 (determination of oil fields) is amended as follows. |
| |
(2) | Before paragraph 1 insert— |
| |
“Areas that are oil fields” |
| 25 |
(3) | After paragraph 5 insert— |
| |
“Areas treated as continuing to be oil fields |
| |
6 (1) | This paragraph applies if an area has ceased to be— |
| |
(a) | an oil field within the meaning of paragraph 1(1), or |
| |
(b) | part of such an oil field. |
| 30 |
(2) | The area is to be treated as continuing to be— |
| |
| |
(b) | the part of the oil field, |
| |
| |
(3) | Accordingly, whilst the area is treated in accordance with sub- |
| 35 |
paragraph (2), any reference to an oil field is to include a reference |
| |
| |
(4) | Sub-paragraph (2) ceases to apply to the area— |
| |
(a) | in accordance with sub-paragraph (5), and |
| |
| |
| |
|
| |
| |
(b) | if or to the extent that it has not ceased to apply in |
| |
accordance with sub-paragraph (5), in accordance with |
| |
| |
(5) | Sub-paragraph (2) ceases to apply to the area if, or to the extent |
| |
| 5 |
(a) | an oil field within the meaning of paragraph 1(1), or |
| |
(b) | part of such an oil field. |
| |
(6) | Sub-paragraph (2) ceases to apply to the area at the end of the |
| |
second chargeable period that falls after the chargeable period in |
| |
which the area is decommissioned. |
| 10 |
7 (1) | A relevant area is decommissioned for the purposes of paragraph |
| |
6 if all qualifying assets of the relevant area are decommissioned. |
| |
(2) | If, and to the extent that, a UK offshore decommissioning regime |
| |
applies to qualifying assets of the relevant area, those assets are |
| |
| 15 |
(a) | the Secretary of State has approved one or more |
| |
abandonment programmes under the regime in relation to |
| |
| |
(b) | those programmes have been carried out to the satisfaction |
| |
of the Secretary of State. |
| 20 |
(3) | If, and to the extent that, a UK offshore decommissioning regime |
| |
does not apply to qualifying assets of the relevant area, those |
| |
assets are decommissioned if the Board are satisfied that they have |
| |
| |
(4) | For the purposes of sub-paragraph (3), the Board must have |
| 25 |
regard to any obligations to decommission the qualifying assets |
| |
which arise under the law applicable to the relevant area (whether |
| |
the law of any part of the United Kingdom or of any other state or |
| |
territory), including any obligations imposed by an authority |
| |
having functions under that law in respect of such |
| 30 |
| |
(5) | If sub-paragraph (3) applies (to any extent) to any qualifying |
| |
assets, the Board must give the responsible person notice of any |
| |
decision the Board make under that sub-paragraph. |
| |
(6) | The responsible person may appeal against such a decision by |
| 35 |
notice in writing given to the Board within three months of the |
| |
responsible person receiving the notice under sub-paragraph (5). |
| |
(7) | An appeal under sub-paragraph (6) may, before it is notified to the |
| |
tribunal, be abandoned by notice in writing given to the Board by |
| |
| 40 |
(8) | The provisions of paragraphs 14A to 14I of Schedule 2 apply to |
| |
appeals under sub-paragraph (6) subject to any necessary |
| |
| |
| |
“qualifying assets” means assets that are qualifying assets |
| 45 |
within the meaning of OTA 1983; |
| |
| |
| |
|
| |
| |
“relevant area” means an area that is treated as being an oil |
| |
field, or part of an oil field, under paragraph 6; |
| |
“UK offshore decommissioning regime” means— |
| |
(a) | Part 4 of the Petroleum Act 1998, and |
| |
(b) | Part 1 of the Petroleum Act 1987.” |
| 5 |
8 | The amendments made by this Part have effect in relation to areas that cease |
| |
to be oil fields, or parts of oil fields, in chargeable periods that begin after 30 |
| |
| |
| |
| |
PRT: abolition of provisional expenditure allowance |
| 10 |
| |
| |
“future chargeable period” means a chargeable period beginning after |
| |
| |
“provisional expenditure allowance” means an amount calculated |
| 15 |
under section 2(9)(a) of OTA 1975. |
| |
| |
2 | No provisional expenditure allowance is to be calculated in respect of a |
| |
future chargeable period. |
| |
Amendments consequential on abolition |
| 20 |
3 (1) | Section 2 of OTA 1975 (assessable profits and allowable losses) is amended |
| |
| |
(2) | For subsection (8) substitute— |
| |
“(8) | The amount (if any) to be debited or credited to the participator for |
| |
the period in respect of expenditure is the sum of the amounts |
| 25 |
mentioned in subsection (9) below.” |
| |
(3) | Omit subsections (9)(a), (10) and (11). |
| |
(4) | In Schedule 17 to FA 1980 (transfers of interests in oil fields), omit paragraph |
| |
11 (and the heading before it). |
| |
(5) | This paragraph has effect in relation to future chargeable periods. |
| 30 |
(6) | But this paragraph is subject to paragraph 4. |
| |
| |
4 (1) | This paragraph applies if provisional expenditure allowance has been |
| |
calculated in respect of a pre-abolition chargeable period (“the relevant |
| |
| 35 |
| |
| |
|
| |
| |
(2) | The saved provisions continue to have effect in future chargeable periods in |
| |
relation to the relevant allowance and the relevant participator as if those |
| |
provisions had not been amended by paragraph 3. |
| |
| |
“pre-abolition chargeable period” means a chargeable period that |
| 5 |
begins before 30 June 2009; |
| |
“relevant participator” means the participator in respect of which the |
| |
relevant allowance has been calculated; |
| |
“the saved provisions” means— |
| |
(a) | section 2(8) and (10) of OTA 1975, and |
| 10 |
(b) | paragraph 11 of Schedule 17 to FA 1980. |
| |
| |
| |
Supplementary charge: reduction for certain new oil fields |
| |
| |
Reduction of adjusted ring fence profits |
| 15 |
1 (1) | A company’s adjusted ring fence profits for an accounting period are to be |
| |
reduced by the amount of the company’s pool of field allowances for that |
| |
accounting period (see Part 2). |
| |
(2) | But, if the profits are less than the amount of the pool, the profits are to be |
| |
| 20 |
| |
| |
Company’s pool of field allowances |
| |
2 | A company’s pool of field allowances for an accounting period (“the |
| |
relevant accounting period”) is—
|
| 25 |
| |
P is the amount of the company’s pool of field allowances for the |
| |
previous accounting period that has been carried into the relevant |
| |
accounting period (see paragraphs 3 and 4), and |
| |
R is the aggregate of the amounts of field allowances for new oil fields |
| 30 |
which the company holds (see Part 3) that are activated in respect |
| |
| |
(a) | the relevant accounting period (see Part 4), and |
| |
(b) | reference periods that fall within the relevant accounting |
| |
| 35 |
Carrying part of pool of field allowances into following period |
| |
3 (1) | This paragraph applies if— |
| |
| |
| |
|
| |
| |
(a) | a company has a pool of field allowances for an accounting period |
| |
(“accounting period 1”), and |
| |
(b) | the company’s adjusted ring fence profits for accounting period 1 are |
| |
reduced to nil in accordance with paragraph 1(2). |
| |
(2) | A part of the company’s pool of field allowances for accounting period 1 is |
| 5 |
to be carried into the following accounting period (“accounting period 2”). |
| |
| (3) The part to be carried into accounting period 2 is—
|
| | | F is the amount of the company’s pool of field allowances for |
| | | 10 | P is the amount of the adjusted ring fence profits for accounting period |
| | | | Carrying whole of pool of field allowances into following period |
| | 4 (1) | This paragraph applies if a company— |
| | (a) | has a pool of field allowances for an accounting period, but |
| 15 | (b) | has no adjusted ring fence profits for the accounting period. |
| | (2) | The whole of the company’s pool of field allowances for the accounting |
| | period is to be carried into the following accounting period. |
| | | | Field allowance: when held and unactivated amount |
| 20 | Initial licensee to hold a field allowance |
| | 5 (1) | A company that is an initial licensee in a new oil field is to hold a field |
| | allowance for that field as from the beginning of the authorisation day. |
| | (2) | The amount of the field allowance which the licensee is to hold at that time |
| | | 25 | | | T is the amount of the total field allowance for the field (see paragraph |
| | | | S is the share of the equity in the field which the initial licensee has at |
| | the beginning of the authorisation day. |
| 30 | Holding a field allowance on acquisition of equity share |
| | 6 | For provision about holding a field allowance by virtue of the acquisition of |
| | a share of the equity in a new oil field, see paragraph 15(2). |
| | Unactivated amount of a field allowance |
| | 7 (1) | This paragraph applies if a company holds a field allowance for a new oil |
| 35 | field by virtue of paragraph 5 or 15(2). |
| | | | | |
|
|
