Section 88: Decommissioning Relief: Decommissioning Expenditure Taken into Account for Prt Purposes
Summary
1.Section 88 amends section 330B Corporation Tax Act 2010 (CTA 2010) to change the accounting period for which a deduction is given. The section provides that the deduction from profits provided by section 330B is given for the accounting period for which an addition to profits is provided by section 330A in respect of decommissioning expenditure.
Details of the Section
2.Subsection (1) provides that section 330B CTA 2010 is amended by subsections (2) to (6).
3.Subsection (2) inserts new paragraph (c) into subsection (1) of section 330B.
4.New paragraph (c) of section 330B(1) CTA 2010 is an additional condition which governs whether section 330B applies. The condition is that an amount equal to the appropriate fraction of the used-up amount of decommissioning expenditure is added under section 330A(2) in calculating the participator’s adjusted ring fence profits for an accounting period.
5.Subsection (3) substitutes subsection (2) in section 330B.
6.New subsection (2) of section 330B provides the deduction to be made in respect of the PRT difference in calculating the adjusted ring fence profits for the accounting period.
7.Subsection (4) inserts a definition of ‘the relevant percentage of the decommissioning expenditure’ in section 330B(3) and makes consequential changes to two other definitions.
8.Subsection (5) makes a consequential amendment to section 330B(4).
9.Subsection (6) amends section 330B(7) to remove one definition and to provide that ‘the used-up amount’ takes the same meaning as in section 330A.
10.Subsection (7) provides that the amendments have effect in relation to expenditure incurred in connection with decommissioning carried out on or after Royal Assent to Finance Act 2013.
Background
11.The amendments made by this section form part of the Government’s wider package of measures to provide greater certainty in respect of decommissioning tax relief, remove barriers to the transfer of licence interests and increase capacity for additional investment in the UK Continental Shelf.
