|
| |
|
(3) | The amount of the field allowance which the transferee is to hold is calculated |
| |
in accordance with subsection (4). |
| |
(4) | The amount referred to in subsections (1) and (3) is—
|
| |
| |
R is the amount of the reduction determined in accordance with section |
| 5 |
| |
E3 is the share of the equity in the new oil field that the transferee has |
| |
acquired from the transferor, and |
| |
E1 and E2 are the same as in section 346. |
| |
(5) | This section has effect at the end of the day on which the disposal takes place. |
| 10 |
| |
| |
(1) | This section applies if there is any alteration in a company’s adjusted ring fence |
| |
profits for an accounting period after this Chapter has had effect in relation to |
| |
| 15 |
(2) | Any necessary adjustments to the operation of this Chapter (whether in |
| |
relation to the profits or otherwise) are to be made (including any necessary |
| |
adjustments to the effect of section 333 on the profits or to the calculation of the |
| |
company’s pool of field allowances for a subsequent accounting period). |
| |
| 20 |
(1) | The Commissioners for Her Majesty’s Revenue and Customs may by order |
| |
make provision about the oil fields that are qualifying oil fields for the |
| |
purposes of this Chapter. |
| |
(2) | The Commissioners for Her Majesty’s Revenue and Customs may by order |
| |
make provision about the amount of the total field allowance for any |
| 25 |
description of new oil field (whether or not provision has been made under |
| |
subsection (1) about that description of new oil field). |
| |
(3) | An order under this section may, in particular, amend any or all of sections 352 |
| |
| |
(4) | No order may be made under this section unless a draft of the statutory |
| 30 |
instrument containing it has been laid before and approved by a resolution of |
| |
| |
| |
| |
In this Chapter “new oil field” means an oil field— |
| 35 |
|
| |
|
| |
|
(a) | which is a qualifying oil field, and |
| |
(b) | whose development is authorised at any time on or after 22 April 2009. |
| |
351 | “Authorisation of development of an oil field” |
| |
(1) | In this Chapter a reference to authorisation of development of an oil field is a |
| |
reference to a national authority— |
| 5 |
(a) | granting a licensee consent for development for the field, |
| |
(b) | serving on a licensee a programme of development for the field, or |
| |
(c) | approving a programme of development for the field. |
| |
| |
“consent for development”, in relation to an oil field, does not include |
| 10 |
consent which is limited to the purpose of testing the characteristics of |
| |
| |
“development”, in relation to an oil field, means winning oil from the field |
| |
otherwise than in the course of searching for oil or drilling wells, and |
| |
“national authority” means— |
| 15 |
(a) | the Secretary of State, or |
| |
(b) | a Northern Ireland Department. |
| |
352 | “Qualifying oil field” |
| |
In this Chapter “qualifying oil field” means an oil field that is, on the |
| |
| 20 |
| |
(b) | an ultra heavy oil field, or |
| |
(c) | an ultra high pressure/high temperature oil field. |
| |
| |
(1) | In this Chapter “small oil field” means an oil field which has reserves of oil of |
| 25 |
3,500,000 tonnes or less. |
| |
(2) | For the purposes of this section and section 356(2)— |
| |
(a) | the amount of reserves of oil which an oil field has is to be determined |
| |
on the authorisation day, and |
| |
(b) | 1,100 cubic metres of gas at a temperature of 15 degrees celsius and |
| 30 |
pressure of one atmosphere is to be counted as equivalent to one tonne. |
| |
354 | “Ultra heavy oil field” |
| |
(1) | In this Chapter “ultra heavy oil field” means an oil field with oil at— |
| |
(a) | an API gravity below 18 degrees, and |
| |
(b) | a viscosity of more than 50 centipoise at reservoir temperature and |
| 35 |
| |
|
| |
|
| |
|
(2) | For that purpose API gravity, in relation to oil, is the amount determined by |
| |
the following calculation—
|
| |
| where G is the specific gravity of the oil at 15.56 degrees celsius. |
| |
355 | “Ultra high pressure/high temperature oil field” |
| |
In this Chapter “ultra high pressure/high temperature oil field” means an oil |
| 5 |
| |
(a) | a pressure of more than 1034 bar in the reservoir formation, and |
| |
(b) | a temperature of more than 176.67 degrees celsius in the reservoir |
| |
| |
356 | “Total field allowance for a new oil field” |
| 10 |
(1) | For the purposes of this Chapter, the total field allowance for a new oil field |
| |
| |
(a) | in the case of a small oil field, the amount determined in accordance |
| |
| |
(b) | in the case of an ultra heavy oil field, £800,000,000, and |
| 15 |
(c) | in the cases of an ultra high pressure/high temperature oil field, |
| |
| |
(2) | The total field allowance for a small oil field is— |
| |
(a) | if the oil field has reserves of oil of 2,750,000 tonnes or less, £75,000,000, |
| |
| 20 |
(b) | in any other case (where the oil field has reserves of more than 2,750,000 |
| |
tonnes but not more than 3,500,000 tonnes), the following amount—
|
| |
| where X is the amount of the reserves of oil (in tonnes) which the oil field has. |
| |
| |
| 25 |
“adjusted ring fence profits”, in relation to a company and an accounting |
| |
period, means the adjusted ring fence profits that would (if this Chapter |
| |
were ignored) be taken into account in calculating the supplementary |
| |
charge on the company under section 330(1) for the accounting period, |
| |
“authorisation day”, in relation to a new oil field, means the day when |
| 30 |
development of the field is authorised, |
| |
“initial licensee”, in relation to a new oil field, means a company that is |
| |
licensee in the field on the authorisation day, |
| |
“licensee” has the same meaning as in Part 1 of OTA 1975, and |
| |
|
| |
|
| |
|
“relevant income”, in relation to a new oil field and an accounting period |
| |
of a company, means production income of the company from any oil |
| |
extraction activities carried on in the field that is taken into account in |
| |
calculating the company’s adjusted ring fence profits for the |
| |
| 5 |
| |
| |
Leasing plant or machinery |
| |
| |
| 10 |
| |
(1) | This Part makes provision about the taxation of leasing transactions involving |
| |
| |
(2) | Chapter 2 makes provision about the treatment for corporation tax purposes of |
| |
companies which are lessors or lessees under long funding leases of plant or |
| 15 |
| |
(3) | The sales of lessors Chapters make provision about the taxation of a company |
| |
which is within the charge to corporation tax in respect of a business of leasing |
| |
plant or machinery (within the meaning of Chapter 3 or 4)— |
| |
(a) | on the sale of, or certain other changes in interests in, the company, and |
| 20 |
(b) | in certain circumstances where the company’s interest in the business |
| |
| |
(4) | In this Part “the sales of lessors Chapters” means Chapters 3 to 6. |
| |
(5) | In the sales of lessors Chapters— |
| |
(a) | Chapter 3 deals with the case of a qualifying change of ownership in |
| 25 |
relation to the company where it carries on the business otherwise than |
| |
| |
(b) | Chapter 4 deals with— |
| |
(i) | the case of a qualifying change in the company’s interest in the |
| |
business where it carries on the business in partnership with |
| 30 |
| |
(ii) | the case of a qualifying change of ownership in relation to any |
| |
| |
(c) | Chapter 5 contains anti-avoidance provisions, and |
| |
(d) | Chapter 6 provides for the general interpretation of those Chapters. |
| 35 |
(6) | For the meaning of “qualifying change of ownership” in the sales of lessors |
| |
Chapters, see sections 392 to 398. |
| |
(7) | For the meaning of “qualifying change in a company’s interest in a business” |
| |
in Chapter 4, see section 415. |
| |
|
| |
|
| |
|
| |
Long funding leases of plant or machinery |
| |
| |
| |
(1) | This Chapter makes provision about the calculation for corporation tax |
| 5 |
purposes of the profits of companies which are— |
| |
(a) | lessors of plant or machinery under long funding finance leases (see |
| |
| |
(b) | lessors of plant or machinery under long funding operating leases (see |
| |
| 10 |
(c) | lessees of plant or machinery under long funding finance leases (see |
| |
| |
(d) | lessees of plant or machinery under long funding operating leases (see |
| |
| |
(2) | Sections 370 to 376 make provision about cases where sections 360 to 369 are |
| 15 |
| |
(3) | For the meaning of expressions used in this section and in this Chapter |
| |
generally, see section 381 and, in particular— |
| |
(a) | subsection (1) of that section (which provides for the application of |
| |
Chapter 6A of Part 2 of CAA 2001 (interpretation of provisions about |
| 20 |
long funding leases) to this Chapter), and |
| |
(b) | subsections (2) and (3) of that section (which specify the provisions of |
| |
that Chapter in which some expressions used in this Chapter are |
| |
| |
Lessors under long funding finance leases |
| 25 |
360 | Lessor under long funding finance lease: rental earnings |
| |
(1) | This section applies for any period of account of a company in which it is the |
| |
lessor of any plant or machinery under a long funding finance lease. |
| |
(2) | The amount to be brought into account as the lessor’s income from the lease for |
| |
the period is the amount of the rental earnings in respect of the lease for the |
| 30 |
| |
(3) | The amount of those rental earnings is the amount which, in accordance with |
| |
generally accepted accounting practice, falls (or would fall) to be treated as the |
| |
gross return on investment for that period in respect of the lease. |
| |
(4) | If the lease is one which, in accordance with such practice, falls (or would fall) |
| 35 |
to be treated as a loan for the period of account, so much of the rentals under |
| |
the lease as falls (or would fall) to be treated as interest is treated for the |
| |
purposes of this section as rental earnings. |
| |
361 | Lessor under long funding finance lease: exceptional items |
| |
(1) | This section applies if— |
| 40 |
|
| |
|
| |
|
(a) | a company is or has been the lessor under a long funding finance lease, |
| |
| |
(b) | an exceptional profit or loss arises to the company in connection with |
| |
| |
(2) | A profit or loss is exceptional for the purposes of subsection (1) if— |
| 5 |
(a) | in accordance with generally accepted accounting practice it falls (or |
| |
would fall) to be recognised for accounting purposes in a period of |
| |
| |
(b) | apart from this section, it would not be brought into account in |
| |
calculating the profits of the company for corporation tax purposes. |
| 10 |
(3) | Such a profit is treated for corporation tax purposes as income of the company |
| |
attributable to the lease. |
| |
(4) | Such a loss is treated for corporation tax purposes as a revenue expense |
| |
incurred by the company in connection with the lease. |
| |
(5) | It does not matter for the purposes of this section whether the profit or loss is |
| 15 |
of an income or capital nature. |
| |
(6) | The reference in subsection (2) to an amount falling to be recognised for |
| |
accounting purposes in a period of account is a reference to an amount falling |
| |
to be recognised for accounting purposes in— |
| |
(a) | the company’s profit and loss account, income statement or statement |
| 20 |
of comprehensive income for that period, |
| |
(b) | the company’s statement of total recognised gains and losses, |
| |
statement of recognised income and expense, statement of changes in |
| |
equity or statement of income and retained earnings for that period, or |
| |
(c) | any other statement of items taken into account in calculating the |
| 25 |
company’s profits or losses for that period. |
| |
362 | Lessor under long funding finance lease making termination payment |
| |
(1) | This section applies if— |
| |
(a) | a company is or has been the lessor under a long funding finance lease, |
| |
(b) | the lease terminates, and |
| 30 |
(c) | a sum calculated by reference to the termination value is paid to the |
| |
| |
(2) | No deduction in respect of the sum is allowed in calculating the profits of the |
| |
company for corporation tax purposes. |
| |
(3) | This section does not prevent a deduction in respect of a sum so far as it is |
| 35 |
brought into account in determining the company’s rental earnings. |
| |
(4) | For the meaning of “termination value”, see section 381(3)(m). |
| |
Lessors under long funding operating leases |
| |
363 | Lessor under long funding operating lease: periodic deduction |
| |
(1) | This section applies if a company is the lessor of any plant or machinery under |
| 40 |
a long funding operating lease for the whole or part of a period of account. |
| |
|
| |
|
| |
|
(2) | A deduction is allowed in calculating the profits of the company for the period |
| |
of account for corporation tax purposes. |
| |
(3) | The amount of the deduction is so much of the expected gross reduction in |
| |
value over the term of the lease as is attributable to the period of account. |
| |
(4) | The expected gross reduction in value over the term of the lease is— |
| 5 |
(a) | the starting value of the plant or machinery, less |
| |
(b) | the amount which at the commencement of the term of the lease is |
| |
expected to be its residual value (or, if section 365 applies, would have |
| |
been expected to be that value had that value been estimated at that |
| |
| 10 |
(5) | The expected gross reduction in value over the term of the lease that is |
| |
attributable to the period of account is found by apportioning that reduction |
| |
on a time basis according to the proportion of the term of the lease that falls in |
| |
| |
(6) | For the meaning of “starting value”, see— |
| 15 |
(a) | section 364 (“starting value”: general), and |
| |
(b) | section 365 (“starting value” where plant or machinery originally |
| |
| |
(7) | For the meaning of “residual value”, see section 381(4). |
| |
364 | “Starting value”: general |
| 20 |
(1) | This section is about the meaning of “starting value” in section 363 in relation |
| |
to a long funding operating lease (“the section 363 lease”). |
| |
(2) | But this section does not apply if the conditions in section 365(2) (“starting |
| |
value” where plant or machinery originally unqualifying) are met. |
| |
(3) | If the only use of the plant or machinery by the lessor has been the leasing of it |
| 25 |
under the section 363 lease as a qualifying activity, the starting value is the |
| |
amount of the expenditure incurred by the lessor on the provision of the plant |
| |
| |
(4) | If subsection (3) does not apply, the starting value depends on the last previous |
| |
use of the plant or machinery by the lessor. |
| 30 |
(5) | If that use was the leasing of it under another long funding operating lease as |
| |
a qualifying activity, the starting value is the market value of the plant or |
| |
machinery at the commencement of the term of the section 363 lease (“market |
| |
| |
(6) | If that use was the leasing of it under a long funding finance lease as a |
| 35 |
qualifying activity, the starting value is the value at which the plant or |
| |
machinery is recognised in the books or other finance records of the lessor at |
| |
the commencement of the term of the section 363 lease. |
| |
(7) | If that use was for the purposes of a qualifying activity other than leasing under |
| |
a long funding lease, the starting value is the lower of cost and market value. |
| 40 |
(8) | For the meaning of “qualifying activity”, see section 381(4). |
| |
|
| |
|