Modifications etc. (not altering text)
1(1)Expenditure incurred by any person in the acquisition of an asset is not allowable under section 3 or 4 of this Act for an oil field if expenditure previously incurred by another person in acquiring, bringing into existence, or enhancing the value of that asset is allowable under that section for that field.U.K.
Section 4(13) of this Act applies to the preceding provisions of this sub-paragraph.
(2)Sub-paragraph (1) above shall, with any necessary modifications, have effect in relation to expenditure incurred by a person—
(a)in renting or hiring an asset or any interest in an asset; or
(b)for the provision of services or other business facilities of whatever kind; or
(c)for the grant or transfer to him of any right, licence or interest (other than an interest in an asset),
as it has effect in relation to expenditure incurred in the acquisition of, or of an interest in, an asset.
Modifications etc. (not altering text)
2[F1(1)Where, in a transaction to which this paragraph applies, a person has incurred expenditure in acquiring, bringing into existence or enhancing the value of an asset, he shall at any time be treated for the purposes of—U.K.
(a)sections 3 and 4 of this Act, and
(b)sections 3 and 4 of and Schedule 1 to the M1Oil Taxation Act 1983,
as having incurred that expenditure only to the extent that it does not exceed expenditure (other than loan expenditure) incurred up to that time in a transaction to which this paragraph does not apply (or, if there has been more than one such transaction, the later or latest of them) in acquiring, bringing into existence or enhancing the value of, that asset.
(1A)Subsections (1) to (3) of section 191 of the Finance Act 1993 apply to determine for the purposes of this paragraph what expenditure has at any time been incurred under a transaction to which this paragraph does not apply, as they apply in relation to expenditure for the allowance of which a claim is received by the Board after 16th March 1993.
(1B)In sub-paragraph (1) above “loan expenditure” means expenditure in respect of interest or any other pecuniary obligation incurred in obtaining a loan or any other form of credit.]
(2)This paragraph applies to any transaction between connected persons and to any transaction made otherwise than at arm’s length; and for the purposes of this paragraph a person is connected with another person if [F2they are connected within the meaning of section [F3839] of the Taxes Act].
[F4(3)The preceding provisions of this section shall, with any necessary modification, apply in relation to expenditure incurred by any person in acquiring an interest in an asset or in bringing into existence an asset in which he is to have an interest, or in enhancing the value of an asset in which he has an interest, as those provisions apply in relation to expenditure incurred by a person in acquiring, bringing into existence, or enhancing the value of an asset, as the case may be.
(4)The provisions of sub-paragraphs (1) to (2) above shall, with any necessary modification, apply in relation to expenditure incurred by any person in respect of—
(a)the use of an asset (including expenditure on renting or hiring), or
(b)the provision of services or other business facilities of whatever kind in connection with the use, otherwise than by that person, of an asset,
as they have effect in relation to expenditure incurred in the acquisition of, or of an interest in, an asset.]
Textual Amendments
F1Sch. 4 para. 2(1)-(1B) substituted for Sch. 4 para. 2(1) (27.7.1993 with effect as mentioned in s. 191(6)) for para. 2(1) by 1993 c. 34, ss. 191(4)(6)
F2Words substituted for Sch. 4 para. 2(2)(a)–(c) by Finance (No. 2) Act 1979 (c. 47), s. 20(2) in relation to expenditure claimed after 31 December 1978
F3Figure substituted by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 para. 32
F4Sch. 4 para. 2(3)(4) substituted for Sch. 4 para. 2(3) (27.7.1993 with effect as mentioned in s. 191(6)) by virtue of 1993 c. 34, ss. 191(5)(6)
Modifications etc. (not altering text)
C4See Oil Taxation Act 1983 (c. 56), Sch. 2 para. 5 in relation to transactions to which Sch. 4 para. 2 applies
Marginal Citations
3(1)This paragraph applies in the case of any oil field from which oil began to be won in commercial quantities before 13th November 1974.U.K.
(2)Expenditure incurred before that date which, apart from this paragraph, would be allowable under section 3 or 4 of this Act for an oil field shall be so allowable only to the extent that it was incurred—
(a)in connection with that field for one or more of the purposes mentioned in paragraphs (a) to (c) of section 3(1) of this Act; or
(b)in acquiring, bringing into existence, or enhancing the value of an asset used on or after that date in connection with the field.
Modifications etc. (not altering text)