Section 225O: Relief for reimbursement expenditure under abandonment guarantees
734.This section provides relief for a participator against ring fence profits where some or all of a participator’s share of decommissioning costs is met by a guarantee and the participator subsequently reimburses the guarantor. It is based on section 63 of FA 1991.
735.Section 63(5) of FA 1991 uses the term “accounting period” and therefore appears to confine the section to corporation tax. A similar point arises in section 65(4) of FA 1991. But sections 62 and 64 of FA 1991 and the remainder of sections 63 and 65 do not suggest that they should be limited to corporation tax. They have, therefore, been rewritten in full for income tax with necessary adaptation (such as “tax year” for “accounting period”) – see Change 10 in Annex 1.