|
| |
|
| |
| |
Oil assets put to other uses |
| |
| |
| |
Allowance of decommissioning and restoration expenditure |
| 5 |
1 (1) | Section 3 of OTA 1975 (allowance of expenditure) is amended as follows. |
| |
(2) | In subsection (1C)(b), for “in connection with the field” substitute “for a |
| |
| |
(3) | In subsection (1D), for “in connection with the field” substitute “for a |
| |
| 10 |
(4) | After that subsection insert— |
| |
“(1DA) | In subsections (1C) and (1D) a reference to use for a qualifying |
| |
purpose is a reference to— |
| |
(a) | use in connection with the taxable field mentioned in |
| |
| 15 |
| |
| |
(ii) | the territorial sea of the United Kingdom, or |
| |
| |
| except use wholly or partly for an ineligible oil purpose. |
| 20 |
(1DB) | In subsection (1DA)(b) the reference to use for an ineligible oil |
| |
purpose is a reference to— |
| |
(a) | use in connection with an oil field other than the taxable field |
| |
mentioned in subsection (1C), and |
| |
(b) | use for any other purpose (apart from a purpose falling |
| 25 |
within section 3(1)(b)) of a separate trade consisting of |
| |
activities falling within section 492(1) of the Income and |
| |
Corporation Taxes Act 1988. |
| |
(1DC) | In subsections (1DA) and (1DB) a reference to use in connection with |
| |
a taxable field or other oil field includes use giving rise to receipts |
| 30 |
which, for the purposes of the Oil Taxation Act 1983, are tariff |
| |
| |
Amounts which are not chargeable tariff receipts |
| |
2 (1) | Section 6 of OTA 1983 (amounts which are not chargeable tariff receipts) is |
| |
| 35 |
| |
(a) | in paragraph (b), insert at the end “or”, and |
| |
(b) | after that paragraph insert— |
| |
“(c) | is referable to other use of an asset, except use wholly |
| |
or partly for an oil purpose,”. |
| 40 |
|
| |
|
| |
|
(3) | After that subsection insert— |
| |
“(4A) | In this section the reference to use of an asset for an oil purpose is a |
| |
| |
(a) | use in connection with an oil field, and |
| |
(b) | use for any other purpose (apart from a purpose falling |
| 5 |
within section 3(1)(b) of the principal Act) of a separate trade |
| |
consisting of activities falling within section 492(1) of the |
| |
Income and Corporation Taxes Act 1988. |
| |
(4B) | In subsection (4A) the reference to use in connection with an oil field |
| |
includes use giving rise to receipts which, for the purposes of this |
| 10 |
Act, are tariff receipts.” |
| |
No reduction of allowable expenditure |
| |
3 (1) | Paragraph 8 of Schedule 1 to OTA 1983 (allowable expenditure: use of new |
| |
asset otherwise than in connection with taxable field) is amended as follows. |
| |
(2) | In sub-paragraph (1)(a) and (b), for “in connection with a taxable field” |
| 15 |
substitute “for a qualifying purpose”. |
| |
(3) | After sub-paragraph (2) insert— |
| |
“(2A) | In sub-paragraph (1) a reference to use for a qualifying purpose is |
| |
| |
(a) | use in connection with a taxable field, and |
| 20 |
| |
| |
(ii) | the territorial sea of the United Kingdom, or |
| |
| |
| except use wholly or partly for an ineligible oil purpose. |
| 25 |
(2B) | In this Act a reference to use of an asset for an ineligible oil |
| |
purpose is a reference to— |
| |
(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 |
| 30 |
within section 3(1)(b) of the principal Act) of a separate |
| |
trade consisting of activities falling within section 492(1) of |
| |
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 |
| 35 |
receipts which, for the purposes of this Act, are tariff receipts.” |
| |
| |
4 | The amendments made by this Part have effect in relation to chargeable |
| |
periods beginning after 30 June 2009. |
| |
|
| |
|
| |
|
| |
| |
General decommissioning expenditure |
| |
5 (1) | Section 163 of CAA 2001 (meaning of “general decommissioning |
| |
expenditure”) is amended as follows. |
| 5 |
(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 |
| |
(b) | has, at any time since it was brought into use, not been used |
| |
wholly for qualifying purposes.” |
| 10 |
(4) | In subsection (4ZC), for “the purposes of the ring fence trade” substitute |
| |
| |
(5) | After subsection (4C) insert— |
| |
“(4D) | In this section a reference to use for qualifying purposes is a reference |
| |
| 15 |
(a) | use for the purposes of any ring fence trade of any person, or |
| |
| |
| |
(ii) | the territorial sea of the United Kingdom, or |
| |
(iii) | an area designated under section 1(7) of the |
| 20 |
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 |
| |
| |
6 | In section 165(4A) of CAA 2001 (general decommissioning expenditure after |
| 25 |
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. |
| 30 |
(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. |
| |
| |
| |
PRT: former licensees and former oil fields |
| |
| 35 |
Persons who cease to be licensees because of cessation events |
| |
1 | OTA 1975 is amended as follows. |
| |
|
| |
|
| |
|
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 paragraph (a) insert— |
| |
“(aa) | a person who is no longer a licensee in respect |
| 5 |
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 |
| 10 |
(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 |
| 15 |
(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— |
| 20 |
(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 |
| 25 |
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; |
| 30 |
| 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 |
| 35 |
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),” |
| 40 |
| |
(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 |
| 45 |
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 |
| |
“this Act” insert “(which also includes provision about areas that are to be |
| 5 |
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” |
| |
(3) | After paragraph 5 insert— |
| 10 |
“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. |
| |
(2) | The area is to be treated as continuing to be— |
| 15 |
| |
(b) | the part of the oil field, |
| |
| |
(3) | Accordingly, whilst the area is treated in accordance with sub- |
| |
paragraph (2), any reference to an oil field is to include a reference |
| 20 |
| |
(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 |
| 25 |
| |
(5) | Sub-paragraph (2) ceases to apply to the area if, or to the extent |
| |
| |
(a) | an oil field within the meaning of paragraph 1(1), or |
| |
(b) | part of such an oil field. |
| 30 |
(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. |
| |
7 (1) | A relevant area is decommissioned for the purposes of paragraph |
| |
6 if all qualifying assets of the relevant area are decommissioned. |
| 35 |
(2) | If, and to the extent that, a UK offshore decommissioning regime |
| |
applies to qualifying assets of the relevant area, those assets are |
| |
| |
(a) | the Secretary of State has approved one or more |
| |
abandonment programmes under the regime in relation to |
| 40 |
| |
|
| |
|
| |
|
(b) | those programmes have been carried out to the satisfaction |
| |
of the Secretary of State. |
| |
(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 |
| 5 |
| |
(4) | For the purposes of sub-paragraph (3), the Board must have |
| |
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 |
| 10 |
territory), including any obligations imposed by an authority |
| |
having functions under that law in respect of such |
| |
| |
(5) | If sub-paragraph (3) applies (to any extent) to any qualifying |
| |
assets, the Board must give the responsible person notice of any |
| 15 |
decision the Board make under that sub-paragraph. |
| |
(6) | The responsible person may appeal against such a decision by |
| |
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 |
| 20 |
tribunal, be abandoned by notice in writing given to the Board by |
| |
| |
(8) | The provisions of paragraphs 14A to 14I of Schedule 2 apply to |
| |
appeals under sub-paragraph (6) subject to any necessary |
| |
| 25 |
| |
“qualifying assets” means assets that are qualifying assets |
| |
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; |
| 30 |
“UK offshore decommissioning regime” means— |
| |
(a) | Part 4 of the Petroleum Act 1998, and |
| |
(b) | Part 1 of the Petroleum Act 1987.” |
| |
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 |
| 35 |
| |
| |
| |
PRT: abolition of provisional expenditure allowance |
| |
| |
| 40 |
“future chargeable period” means a chargeable period beginning after |
| |
| |
|
| |
|
| |
|
“provisional expenditure allowance” means an amount calculated |
| |
under section 2(9)(a) of OTA 1975. |
| |
| |
2 | No provisional expenditure allowance is to be calculated in respect of a |
| |
future chargeable period. |
| 5 |
Amendments consequential on abolition |
| |
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 |
| 10 |
the period in respect of expenditure is the sum of the amounts |
| |
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). |
| 15 |
(5) | This paragraph has effect in relation to future chargeable periods. |
| |
(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 |
| 20 |
| |
(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. |
| |
| 25 |
“pre-abolition chargeable period” means a chargeable period that |
| |
begins before 30 June 2009; |
| |
“relevant participator” means the participator in respect of which the |
| |
relevant allowance has been calculated; |
| |
“the saved provisions” means— |
| 30 |
(a) | section 2(8) and (10) of OTA 1975, and |
| |
(b) | paragraph 11 of Schedule 17 to FA 1980. |
| |
|
| |
|