Oil Taxation Act 1975

SCHEDULES

Section 1.

SCHEDULE 1 U.K. Determination of Oil Fields

Modifications etc. (not altering text)

C1 See Finance Act 1982 (c. 39), s. 135

1 (1) For the purposes of this Part of this Act an oil field is any area which the appropriate authority may determine to be an oil field, being an area of which every part is, or is part of, a licensed area.

(2) For the purposes of this Schedule the appropriate authority, in relation to any area—

(a) is the Secretary of State if the area is such that licences can be granted for all of it under the M1 Petroleum (Production) Act 1934;

(b) is the Department of Commerce for Northern Ireland if the area is such that licences can be granted for all of it under the M2 Petroleum (Production) Act (Northern Ireland) 1964; and

(c) is the Secretary of State and that Department acting jointly if the area is such that licences can be granted for part of it under one and for part of it under the other of those Acts;

and any reference in this Schedule to the making of representations to the appropriate authority is, in a case falling within (c) above, a reference to the making of them to either the Secretary of State or the said Department.

Marginal Citations

M1 1934 c. 36.

M2 1964 c. 28 (N.I.)

2 U.K. Before determining an area to be an oil field the appropriate authority—

(a) shall give notice in writing of the proposed determination to every person who is a licensee in respect of a licensed area wholly or partly included in that area and to any other licensee whose interests appear to the authority to be affected; and

(b) shall consider any representations in writing which a person to whom a notice under this paragraph has been given may make to the authority within sixty days of receiving the notice,

and the determination may be made either as proposed or with such modifications as appear to the authority to be appropriate after considering any representations made to the authority in accordance with this paragraph.

3 U.K. A determination under this Schedule shall be in such form as the appropriate authority thinks fit and shall for purposes of identification assign to the field to which it relates a distinguishing number or other designation.

4 U.K. The appropriate authority shall give notice of any determination made by the authority under this Schedule to each of the persons to whom notice of the proposed determination was given.

5 U.K. A determination under this Schedule may from time to time be varied by a new determination thereunder made by the appropriate authority, and paragraphs 2 to 4 above shall apply to any such new determination.

Section 1.

SCHEDULE 2 U.K. Management and Collection of Petroleum Revenue Tax

Modifications etc. (not altering text)

C2 See Oil Taxation Act 1983 (c. 56), Sch. 4 para. 14 for application of Sch. 2 to tax chargeable only by virtue of the provisions of s. 12 and Sch. 4 of that Act

Management of tax U.K.

1 (1) The tax shall be under the care and management of the Board; and the provisions of the M3 Taxes Management Act 1970 specified in the first column of the following Table shall apply in relation to the tax as they apply in relation to a tax within the meaning of that Act, subject to any modifications specified in the second column of that Table and with the substitution, for references to Part IX of that Act or to the Taxes Acts, of references to this Part of this Act and, for references to chargeable periods within the meaning of that Act, of references to chargeable periods within the meaning of this Part of this Act. U.K.

Table

Provisions applied	Modifications
Section
1(3)
4
33	In subsection (1), for the words from “year of assessment” to “in” substitute “ chargeable period for ”.
	In subsection (3), after “assessments made on” insert “ or determinations made in relation to ”.
	In subsection (5), for the words following “profits” substitute “ means assessable profits. ”
34
36	Omit the reference to section 41, after “default”, wherever occurring, insert “ or any neglect ” and at the end add the following paragraph—
	“ For the purposes of this section any fraud, wilful default or neglect committed at any time by a responsible person for an oil field in connection with or in relation to the tax shall be treated as having been committed on behalf of each of the participators in that field at that time. ”
[F1 Section 46A	In subsection (1), omit paragraphs (a) and (b) and the words “General Commissioners or” in paragraph (c).]
48
49(1)
50(1)-(5)	F2 . . ..
51	. . .
5 2	. . .
5 3
5 6	F3 . . .
[F4 Section 56A	-
56B	-
56C	-
56D	-]
[F5 58(2B) (2C)	Omit the words ”on a case stated under regulation 22 of the General Commissioners (Jurisdiction and Procedure) Regulations 1994 or”]
(3)	. . . F6 , for paragraphs (a) and (b), substitute “ “proceedings in Northern Ireland” means proceedings in respect of an oil field which is wholly situated in an area for which licences can be granted under the M4 Petroleum (Production) Act (Northern Ireland) 1964 ”.
60	In subsection (1), omit the words following “charged therewith”.
61	In subsection (1), omit the words from “distrain upon” to “is charged or”.
62(1)	Omit “or which are payable for the year in which the seizure is made” and for “one year” and “one whole year” substitute “ two chargeable periods ”.
(2)	For “one whole year” substitute “ two chargeable periods ”.
63
64(1)	For “one year” and “one whole year” substitute “ two chargeable periods ”.
(2)	For “one whole year” substitute “ two chargeable periods ”.
66
67
68
69	In paragraph (a), substitute a reference to section 68 as applied by this paragraph for the reference to the sections there specified.
70(1)
(2)	For the reference to section 86 or 87 substitute a reference to paragraph 15 of this Schedule.
89(2)	For the reference to the rate or rates of interest prescribed by subsection (1) of that section substitute a reference to the rate of interest mentioned in paragraph 15 of this Schedule.
(3)
90
98	F7 . . .
99
F8 Section 100C(1)	[F8 For the words from “General” to the end substitute “ Special Commissioners for any penalty ”.]
[F8 (2)]	[F8 Before “Commissioners” insert “ Special ”.]
[F8 (3)]	[F8 Before “Commissioners” insert “ Special ”.]
[F8 (4)]
[F8 F8 ( 5)]
F8 101	For the reference to income or chargeable gains substitute a reference to assessable profits.
102
[F9 Section103(1)]	[F9 For the words from the beginning to “court -” substitute “ Where the amount of a penalty is to be ascertained by reference to tax payable by a person for any period , proceedings for the penalty may be commenced before the Special Commissioners- ”]
[F9 (4)]	[F9 For the words from the beginning to “court,”substitute “ Proceedings for a penalty to which subsection (1) above does not apply may be commenced before the Special Commissioners.] ”
104
105
107(1)–(3)
108	In subsection (2), for the words from the beginning to “Acts” substitute “ The tax chargeable ”.
112	In subsection (1), after “assessment to tax” and “the assessment” insert “ or determination ” and after “duplicate of assessment to tax” and “duplicate of assessment” insert “ or of determination ”.
113(1A)
(3)	After “assessment” insert “ determination ” and after “notice of assessment” insert “ notice of determination ”.
114	After “assessment” wherever occurring insert “ or determination ”.
115(1)–(3)
118(1)
(2)

(2) Any expression to which a meaning is given in this Part of this Act which is used in a provision of the M5 Taxes Management Act 1970 applied by this paragraph shall, in that provision as so applied, have the same meaning as in this Part of this Act.

Textual Amendments

F1 Entry in Sch. 2 para. 1(1) Table (relating to s. 46A) inserted (16.7.1992 with effect in accordance with s. 74(5) of the amending Act) by Finance (No. 2) Act 1992 (c. 48), s. 76, Sch. 16 para. 6(2)

F2 Entries in Sch. 2 para. 1(1) Table (relating to ss. 50(1)-(5), 51, 52) repealed by S.I. 1994/1813, reg. 2, Sch. 1 para. 18(a), Sch. 2 Pt. I

F3 Entry in Sch. 2 para. 1(1) Table relating to s. 56 repealed by S.I. 1994/1813, reg. 2, Sch. 1 para. 18(a), Sch. 2 Pt. I

F4 Entries in Sch. 2 para. 1(1) Table (relating to ss. 56A- 56D) inserted (16.7.1992 with effect in accordance with s. 74(5) of the amending Act) by Finance (No. 2) Act 1992 (c. 48), s. 76, Sch. 16 para. 6(3)

F5 Entries in Sch. 2 para. 1(1) Table (relating to s. 58(2B)(2C)) substituted by S.I. 1994/1813, reg. 2, Sch. 1 para. 18(b)

F6 Words in Sch. 2 para. 1(1) Table repealed by Finance Act 1988 (c. 39, SIF 63:1,2), s. 148, Sch. 14 Part IX and S.I. 1989 No. 473 (c. 17)

F7 Entry in Sch. 2 para. 1(1) Table relating to s. 98 repealed by S.I. 1994/1813, reg. 2 Sch. 1 para. 18(c)

F8 Entries in Sch. 2 para. 1(1) Table (relating to s. 100C) substituted (for entries relating to s. 100) by Finance Act 1991 (c. 31), s. 109(1)(2)

F9 Entries in Sch. 2 para. 1(1) Table (relating to s. 103) substituted by Finance Act 1991 (c. 31), s. 109 (1)(3)

Modifications etc. (not altering text)

C3 See also Finance Act 1981 (c. 35), s. 128(1) and Sch. 16 para. 2; Oil Taxation Act 1983 (c. 56), Sch. 4 para. 9(1)

Marginal Citations

M3 1970 c. 9.

M4 1964 c. 28(N.I.)

M5 1970 c. 9.

Returns by participators U.K.

2 (1) Every participator in [F10 a taxable field]shall, for each chargeable period, prepare and, within two months after the end of the period, deliver to the Board a return complying with the following provisions of this paragraph; but nothing in this sub-paragraph shall require a participator to deliver a return under this paragraph before 31st August 1975.

(2) A return under this paragraph for a chargeable period shall give the following information in relation to oil which is or was included in the participator’s share of any oil won from [F10 the taxable field] (whether or not in that period), that is to say—

(a) in the case of each delivery (other than one made before 13th November 1974) in the period of oil disposed of by him crude (other than oil delivered as mentioned in (c) of this sub-paragraph), the return shall—

(i) state the quantity of oil delivered;

(ii) state the person to whom the oil was disposed of;

(iii) in the case of oil disposed of in a sale at arm’s length, state the price received or receivable for the oil or, in the case of oil disposed of otherwise than in a sale at arm’s length, state the market value of the oil [F11 at the material time] in the calendar month in which the delivery was made [F12 or (in the case of light gases) the market value as determined in accordance with paragraph 3A of Schedule 3 to this Act]; and

(iv) contain such other particulars of or relating to the disposal as the Board may prescribe;

(b) in the case of each relevant appropriation of crude oil (other than one made before 13th November 1974) in the period (not being oil disposed of by him), the return shall—

(i) state the quantity of oil appropriated;

(ii) state the market value of the oil [F11 at the material time] in the calendar month in which the appropriation was made [F13 or (in the case of light gases) the market value as determined in accordance with paragraph 3A of Schedule 3 to this Act]; and

(iii) contain such other particulars of or relating to the appropriation as the Board may prescribe;

(c) in the case of crude oil delivered to the Secretary of State in the period under the terms of a licence granted under the M6 Petroleum (Production) Act 1934, the return shall state the total quantity of the oil;

(d) in the case of crude oil which, at the end of the period, has either not been disposed of and not relevantly appropriated or has been disposed of but not delivered, the return shall—

(i) state the quantity of the oil;

(ii) state the market value of the oil [F14 in the last calendar month] of the period; and

(iii) contain such other particulars relating to the oil as the Board may prescribe.

[F15 (2A) Every participator in [F10 a taxable field] shall, in the first return under this paragraph which he makes for that field, state whether any and, if any, how much [F16 expenditure to which section 5A or section 5B] of this Act applies and which relates to, or to a licence for, any part of the field has been claimed under Schedule 7 to this Act—

(a) by him, or

(b) by a company associated with him in respect of that expenditure, or

(c) if he or such a company is the new participator, within the meaning of Schedule 17 to the Finance Act 1980, by the old participator, within the meaning of that Schedule, or by a company associated with him in respect of that expenditure,

and subsection (7) of section 5 of this Act applies for the purposes of this sub-paragraph as it applies for the purposes of that section.]

(3) A return under this paragraph for a chargeable period shall state—

(a) the amount of royalty payable by the participator for that period in respect of his share of oil won from the field as shown in the return or returns made by him to the Secretary of State under the relevant licence or licences;

(b) the amount of royalty paid by the participator in that period in respect of that share;

(c) the amount of any royalty paid under any relevant licence in respect of the field which was repaid to the participator in that period; and

(d) the amount of any periodic payment made by the participator to the Secretary of State in that period under each relevant licence otherwise than by way of royalty.

[F17 (3A) A return under this paragraph for a chargeable period shall—

(a) state the amount (if any) which, in the case of the participator, is to be brought into account for that period in accordance with section 2(5)(e) of this Act;

(b) contain such particulars as the Board may prescribe (whether before or after the passing of the Finance Act 1987) with respect to any nominated transaction under Schedule 10 to that Act—

(i) the effective volume of which forms part of the participator’s aggregate effective volume (construing those terms in accordance with that Schedule) for any calendar month comprised in that chargeable period; and

(ii) which has not led to deliveries of oil or relevant appropriations of which particulars are included in the return by virtue of sub-paragraph (2) above; and

(c) contain such other particulars as the Board may prescribe (as mentioned above) in connection with the application of section 61 of and Schedule 10 to the Finance Act 1987.]

(4) A return under this paragraph shall be in such form as the Board may prescribe and shall include a declaration that the return is correct and complete.

Textual Amendments

F10 Words in Sch. 2 para. 2(1)(2)(2A) substituted (27.7.1993) by 1993 c.34 s. 187(1)

F11 Words repealed by Finance Act 1987 (c. 16), ss. 62(1)(d), 72(7) and Sch. 16 Part X for chargeable periods ending after 31 December 1986

F12 Words in Sch. 2 para. 2(2)(a)(iii) inserted (3.5.1994) by 1994 c. 9, s. 236(1), Sch. 23 para. 2

F13 Words in Sch. 2 para. 2(2)(b)(ii) inserted (3.5.1994) by 1994 c. 9, s. 236(1), Sch. 23 para. 2

F14 Words substituted by Finance Act 1987 (c. 16), s. 62(2) for chargeable periods ending after 31 December 1986

F15 Schedule 2 para. 2(2A) inserted by Finance Act 1983 (c. 49), s. 37(2) and Sch. 8 Part II para. 5

F16 Words substituted by Finance Act 1987 (c. 16), s. 64(2) and Sch. 13 Part II para. 4

F17 Schedule 2 para. 2(3A) inserted by Finance Act 1987 (c. 16), s. 61(1) and Sch. 10 para. 13

Modifications etc. (not altering text)

C4 See Petroleum Revenue Tax Act 1980 (c. 1, SIF 63:1), s. 1; Finance Act 1981 (c. 35), ss. 118, 128(1) and Sch. 16 para. 3; Finance Act 1982 (c. 39), s. 135(1)(b), (3)(a); Oil Taxation Act 1983 (c. 56), s. 10(1)(2); Finance Act 1984 (c. 43), s. 114(7)

C5 See Oil Taxation Act 1983 (c. 56), s. 10(3)

Marginal Citations

M6 1934 c. 36.

3 (1) If a participator fails to deliver a return within the time allowed for doing so under paragraph 2(1) above he shall be liable, subject to sub-paragraph (3) below— U.K.

(a) to a penalty not exceeding, except in the case mentioned in sub-paragraph (2) below, £500; and

(b) if the failure continues after it has been declared by the court or the Commissioners before whom proceedings for the penalty have been commenced, to a further penalty not exceeding £100 for each day on which the failure so continues.

(2) If the failure continues after the end of six months from the time by which the return ought to have been delivered, the penalty under sub-paragraph (1)(a) above shall be an amount not exceeding the aggregate of £500 and the total amount of the tax with which the participator is charged for the chargeable period in question.

(3) Except in the case mentioned in sub-paragraph (2) above, the participator shall not be liable to any penalty incurred under this paragraph for failure to deliver a return if the failure is remedied before proceedings for the recovery of the penalty are commenced.

Modifications etc. (not altering text)

C6 See Finance Act 1981 (c. 35), s. 128(1) and Sch. 16 para. 3; Finance Act 1982 (c. 39), s. 139(6) and Sch. 19 para. 1(5); Oil Taxation Act 1983 (c. 56), s. 10(3)

Appointment of responsible person for each oil field U.K.

4 (1) For each oil field a body corporate or partnership shall be appointed in accordance with this paragraph as the responsible person for that field to perform, in relation to the field, any functions conferred on it as such by this Part of this Act; and the body or partnership which for the time being holds that appointment is in this Part of this Act referred to as “the responsible person”. U.K.

(2) No body corporate shall be eligible for appointment as the responsible person for [F18 a taxable field] unless it is resident in the United Kingdom, and no partnership shall be so eligible unless all its members are resident there.

(3) The participators in [F18 a taxable field] shall, by notice in writing to the Board within the initial period, nominate a body corporate or a partnership for appointment as the responsible person for that oil field and, if the Board approve the nomination, the Board shall appoint that body or partnership as the responsible person and give it notice that it has been so appointed.

(4) If—

(a) the participators have made no nomination within the initial period; or

(b) the Board do not appoint the body or partnership nominated under sub-paragraph (3) above,

the Board shall appoint one of the participators in [F18 the taxable field] as the responsible person for the field and shall give notice to that participator that he has been so appointed.

(5) For the purposes of the preceding provisions of this paragraph, the initial period is the period of thirty days beginning with the latest date on which notice of determination of [F18 the taxable field] is given to any of the participators under paragraph 4 of Schedule 1 to this Act.

(6) The Board may at any time, on the application of all the participators in [F18 a taxable field], appoint a body corporate or partnership nominated by the participators as the responsible person for that field in place of the body corporate or partnership which is the responsible person at that time, and shall give the body or partnership so appointed notice that it has been so appointed.

(7) The Board may, by notice in writing to the body corporate or partnership which is for the time being the responsible person for [F18 a taxable field], revoke the appointment of that body or partnership as the responsible person for that field; and where they do so the Board shall appoint one of the participators in [F18 the taxable field] as the responsible person for that field and shall give notice to the participator that he has been so appointed.

(8) In this paragraph “participator”, in relation to [F18 a taxable field], means a person who is a licensee in respect of any licensed area wholly or partly included in the field.

Textual Amendments

F18 Words in Sch. 2 para. 4 substituted (27.7.1993) by 1993 c.34 s. 187(1)

Modifications etc. (not altering text)

C7 See Oil Taxation Act 1983 (c. 56), Sch. 4 para. 13 in relation to a foreign field

Returns by the responsible person U.K.

5 (1) The responsible person for [F19 a taxable field]shall, for each chargeable period, prepare and, within one month after the end of the period, deliver to the Board a return for that period complying with sub-paragraphs (2) and (3) below; but nothing in this sub-paragraph shall require the responsible person to deliver a return under this paragraph before 31st July 1975.

(2) A return under this paragraph for a chargeable period shall—

(a) state the quantity of oil won and saved from [F19 the taxable field] during the period;

(b) state the respective interests of the participators in the field in that oil;

(c) state what, in accordance with those interests, is each participator’s share of that oil; and

(d) contain such other particulars of or relating to the field as the Board may require.

[F20 (2A) The reference in sub-paragraph (2)(d) above to particulars of or relating to the field includes a reference to particulars required for determining the amount by which any qualifying tariff receipts, within the meaning of section 9 of the Oil Taxation Act 1983, are to be treated as reduced by virtue of that section.]

[F21 (2B) If in any chargeable period oil won from [F19 the taxable field] is mixed as mentioned in section 63 of the Finance Act 1987 so as to give rise to blended oil, within the meaning of that section, then, as respects that chargeable period, for paragraph (a) of sub-paragraph (2) above there shall be substituted the following paragraph—

“(a) state the total of the shares of the participators in [F19 the taxable field] of the oil won from the field during the period less so much of the oil won from the field as is not saved”.]

(3) A return under this paragraph shall be in such form as the Board may prescribe and shall include a declaration that the return is correct and complete.

Textual Amendments

F19 Words in Sch. 2 para. 5 substituted (27.7.1993) by 1993 c.34 s. 187(1)

F20 Schedule 2 para. 5(2A) inserted by Oil Taxation Act 1983 (c. 56), s. 10(4) with respect to chargeable periods ending after 1 December 1983

F21 Schedule 2 para. 5(2B) inserted by Finance (No. 2) Act 1987 (c. 51), s. 101(4) for chargeable periods ending after 1 January 1987

Modifications etc. (not altering text)

C8 See Finance Act 1981 (c. 35), s. 128(1) and Sch. 16 para. 3; Finance Act 1982 (c. 39), s. 135(1)(b), (3)(b); Oil Taxation Act 1983 (c. 56), s. 10(5)

6 (1) If the responsible person fails to deliver a return within the time allowed for doing so under paragraph 5(1) above he shall be liable— U.K.

(a) to a penalty not exceeding £500, and

(b) if the failure continues after it has been declared by the court or Commissioners before whom proceedings for the penalty have been commenced, to a further penalty not exceeding £100 for each day on which the failure so continues.

(2) The responsible person shall not be liable to any penalty incurred under sub-paragraph (1) above for failure to deliver a return if the failure is remedied before proceedings for the recovery of the penalty are commenced.

Production of accounts, books and other information U.K.

F22 7 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F22 Sch. 2 para. 7 repealed (27.7.1993) by 1993 c.34 s. 187(1), 213, Sch. 23 Pt.IV

Incorrect returns, accounts, etc. U.K.

8 (1) Where a participator in [F23 a taxable field] fraudulently or negligently— U.K.

(a) delivers an incorrect return under paragraph 2 above; or

(b) makes any incorrect statement or declaration in connection with any claim under this Part of this Act for the allowance of any expenditure or for any relief in respect of the tax; or

(c) submits to the Board or the Special Commissioners any incorrect accounts in connection with the ascertainment of the participator’s liability to the tax,

the participator shall be liable to a penalty not exceeding the aggregate of—

(i) £50, and

(ii) the amount or, in the case of fraud, twice the amount, of the difference specified in sub-paragraph (2) below.

(2) The difference is that between—

(a) the amount of tax payable by the participator—

(i) for the chargeable period to which the return relates; or

(ii) for the next chargeable period ending after the allowance of the claim; or

(iii) for the chargeable period or periods against which the relief is claimed; or

(iv) for the chargeable period or periods for which the accounts are relevant,

as the case may be; and

(b) the amount which would have been the amount so payable if the return, statement, declaration or accounts as made or submitted by him had been correct.

(3) Where the responsible person for [F23 a taxable field] fraudulently or negligently—

(a) delivers an incorrect return under paragraph 5 above; or

(b) makes any incorrect statement or declaration in connection with any claim under this Part of this Act for the allowance of any expenditure,

the responsible person shall be liable to a penalty not exceeding £2,500 or, in the case of fraud on his part, £5,000.

Textual Amendments

F23 Words in Sch. 2 para. substituted (27.7.1993) by 1993 c.34 s. 187(1)

Modifications etc. (not altering text)

C9 See Finance Act 1981 (c. 35), s. 128(1) and Sch. 16 para. 3; Finance Act 1982 (c. 39), ss. 134(5), 139(6), Schs. 18 para. 10, 19 paras. 1(5), 3(2)

C10 See Finance Act 1981 (c. 35), s. 128(1) and Sch. 16 para. 3

9 (1) Where any such return, statement, declaration or accounts as are mentioned in paragraph 8 above were made or submitted by any person neither fraudulently nor negligently and it comes to his notice that they were incorrect, then, unless the error is remedied without unreasonable delay, the return, statement, declaration or accounts shall be treated as having been negligently made or submitted by the first-mentioned person. U.K.

(2) Where any such return, statement, declaration or accounts were made or submitted by the responsible person for [F24 a taxable field] neither fraudulently nor negligently and it comes to the notice of any person who subsequently becomes the responsible person for that field that they were incorrect, then, unless the error is remedied without unreasonable delay, the return, statement, declaration or accounts shall be treated as having been negligently made or submitted by the responsible person to whose notice the incorrectness came.

(3) For the purposes of paragraph 8 above, any accounts submitted on behalf of any person shall be deemed to have been submitted by that person unless he proves that they were submitted without his consent or connivance.

Textual Amendments

F24 Words in Sch. 2 para. 9 substituted (27.7.1993) by 1993 c.34 s. 187(1)

Modifications etc. (not altering text)

C11 See Finance Act 1982 (c. 39), ss. 134, 139(6), Schs. 18 para. 10, 19 paras. 1(5)

Assessments to tax and determinations of loss, etc. U.K.

10 (1) Where it appears to the Board that, in accordance with the provisions of this Part of this Act, an assessable profit has accrued to a participator in a chargeable period from [F25 a taxable field], they shall make an assessment to tax on the participator and shall give him notice of the assessment. U.K.

(2) Where it appears to the Board that, in accordance with those provisions, an allowable loss has accrued to a participator in a chargeable period from [F25 a taxable field], they shall make a determination that the loss is allowable to the participator and shall give him notice of the determination.

(3) Where it appears to the Board that, in accordance with those provisions, neither an assessable profit nor an allowable loss has accrued to a participator in a chargeable period, they shall make a determination to that effect and shall give him notice of the determination.

(4) A notice of assessment for a chargeable period shall state the amount of any allowable losses which, in accordance with those provisions, have been set against the assessable profit for that period.

(5) A notice of assessment or determination shall state that the participator may appeal against the assessment or determination in accordance with paragraph 14 below.

(6) After the service of the notice of assessment or the notice of determination the assessment or determination, as the case may be, shall not be altered except in accordance with the express provisions of this Part of this Act (including the provisions applied by paragraph 1 above).

Textual Amendments

F25 Words in Sch. 2 para. 10 substituted (27.7.1993) by 1993 c.34 s. 187(1)

Modifications etc. (not altering text)

C12 See Finance Act 1980 (c. 48), s. 106 and Sch. 17 para. 14 where interest in oil field transferred after 1 August 1980

11 (1) Where a participator has under paragraph 2 above delivered to the Board a return for a chargeable period and the Board are satisfied that the information given in the return is correct in so far as it is material for the purpose of computing his assessable profit or allowable loss (if any) for that period, the Board shall (in so far as the computation falls to be made by reference to the matters dealt with in the return) make the assessment or determination under paragraph 10 above in accordance with the return. U.K.

(2) Where the Board are not so satisfied in relation to a participator’s return or a participator fails to deliver to the Board a return for a chargeable period as required by paragraph 2 above, the Board shall, in so far as the computation of his assessable profit or allowable loss (if any) for that period falls to be made by reference to the matters which were dealt with in the return or, as the case may be, ought to have been dealt with in a return, make the assessment or determination under paragraph 10 above to the best of their judgment.

(3) Nothing in sub-paragraph (2) above or in paragraph 5 above shall be taken, in a case where the participator has delivered a return as to which the Board are not satisfied as mentioned in sub-paragraph (1) above, to prevent the Board from basing their assessment or determination on the participator’s having had an interest in oil won and saved from the field different from that on which he based his return.

12 (1) Where it appears to the Board— U.K.

(a) that the assessable profit charged to tax by or stated in an assessment ought to be or to have been larger or smaller; or

(b) that the allowable loss stated in an assessment or a determination of loss ought to be or to have been larger or smaller; or

(c) that, where they made a determination that neither an assessable profit nor an allowable loss accrued in a chargeable period, they ought to have made an assessment to tax or a determination of loss for that period, [F26 or]

[F27 (d) that for any chargeable period they ought to have made an assessment to tax instead of a determination of loss or a determination of loss instead of an assessment to tax];

the Board may make such assessments or determinations or such amendments of assessments or determinations as may be necessary; and where the Board exercise any of their powers under this paragraph in relation to a chargeable period, they may make such [F28 assessments or determinations or amendments of assessments or determinations] for other chargeable periods as may be necessary in consequence of the exercise of those powers[F29 and “taxable field” and “non-taxable field” have the same meaning as in Part III of the Finance Act 1993].

(2) Where under sub-paragraph (1) above it appears to the Board that the assessable profit for a chargeable period ought to have been larger and that the deficiency resulted from an excessive allowable loss accruing in a subsequent period having been set against the profit for that period, the Board may (notwithstanding anything in section 34 of the M7 Taxes Management Act 1970 (ordinary time limit for assessments)) make a further assessment by virtue of sub-paragraph (1) above at any time not later than six years after the end of the chargeable period in which the allowable loss accrued.

[F30 (3) Where under this paragraph the Board make an assessment or determination or amend an assessment or determination they shall give notice thereof to the participator concerned; and sub-paragraphs (4), (5) and (6) of paragraph 10 above shall apply in relation to any such assessment, determination or amendment as they apply in relation to an assessment or determination under that paragraph.]

Textual Amendments

F26 Word added by Finance Act 1976 (c. 40), s. 130(2)

F27 Sch. 2 para. 12(1)(d) added by Finance Act 1976 (c. 40), s. 130(2)

F28 Words substituted by Finance Act 1976 (c. 40), s. 130(2)

F29 Definitions in s. 12(1) added (27.7.1993) by 1993 c.34 s. 185(5)

F30 Sch. 2 para. 12(3) added by Finance Act 1976 (c. 40), s. 130(3)(4)

Modifications etc. (not altering text)

C13 See Oil Taxation Act 1983 (c. 56), Sch. 5 para. 5(3) in relation to transitional provisions introduced by s. 13 and Sch. 5 of that Act

Marginal Citations

M7 1970 c. 9.

Valid from 27/07/1999

[F31 12A (1) Where— U.K.

(a) the Board has extended the period for the delivery of any return that is required under paragraph 2 of this Schedule to be delivered for any chargeable period, and

(b) the relevant time falls more than one year after the end of the chargeable period,

the period within which the Board may make an assessment under this Schedule for that chargeable period shall not expire before the end of the period of five years beginning with the relevant time.

(2) In this paragraph “the relevant time” means the earlier of—

(a) the time which, as a result of the extension, is the latest time for the delivery of the return; and

(b) the time when the return is delivered.]

Textual Amendments

F31 Sch. 2 para. 12A inserted (27.7.1999 with application in relation to chargeable periods ending on or after 30.6.1999) by 1999 c. 16, s. 102(3)(8)

Payment of tax U.K.

13 U.K. Subject to paragraph 14 below, the tax charged in an assessment made on a participator for any chargeable period [F32 and payable shall be due within six months] after the end of that chargeable period or, if later, thirty days after the date of issue of the notice of assessment; but no tax shall be payable by virtue of this paragraph before 30th April 1976.

Textual Amendments

F32 Words substituted by Finance Act 1982 (c. 39), s. 139(6) and Sch. 19 para. 19 with respect to chargeable periods ending on or after 30 June 1983

Modifications etc. (not altering text)

C14 See Finance Act 1982 (c. 39), s. 135(1)(b)

C15 See Finance Act 1982 (c. 39), s. 142(5)

Appeals U.K.

14 (1) A participator may appeal to the Special Commissioners against an assessment or determination [F33 or an amendment of an assessment or determination] made on or in relation to him by notice of appeal in writing given to the Board within thirty days after the date of issue of the notice of assessment or determination [F33 or of the notice of the amendment]. U.K.

(2) The notice of appeal shall specify the grounds of appeal, but on the hearing of the appeal the Commissioners may allow the appellant to put forward any ground not specified in the notice, and may take it into consideration if satisfied that the omission was not wilful or unreasonable.

(3) A participator who has given notice of appeal under sub-paragraph (1) above against an assessment charging him with any tax for a chargeable period may, if he delivered a return for that period as required by paragraph 2 above, withhold, until the determination or abandonment of the appeal, so much of the tax charged in the assessment as is the smaller of—

(a) the amount of the tax so charged; and

(b) tax on the difference between—

(i) the aggregate of the consideration received or receivable for oil as stated in the participator’s return in pursuance of sub-paragraph (2) of that paragraph and, subject to sub-paragraph (4) below, the market value of oil as so stated; and

(ii) the aggregate of the corresponding consideration and value as included in the assessment.

(4) Subject to sub-paragraph (5) below, where the market value of all the oil for which a market value is stated in the participator’s return is, as stated in that return, less than the value which is produced for that oil by applying to it the average price mentioned in sub-paragraph (6) below, sub-paragraph (3) above shall have effect as if, for the reference to the market value of oil as so stated, there were substituted a reference to the value which is so produced for that oil.

(5) The comparison of values and the substitution required by sub-paragraph (4) above shall, in the case of an appeal by a participator whose return relates both to gas and to other oil, be made separately for the gas and for the other oil.

(6) The average price referred to in sub-paragraph (4) above is the average price at which all oil included in the relevant returns as oil delivered in the period covered by the returns and disposed of in sales at arm’s length was so disposed of.

(7) The relevant returns for the purposes of sub-paragraph (6) above are all the returns of all the participators in all oil fields which—

(a) were made for the chargeable period preceding that to which the appeal relates; and

(b) were delivered before the end of the chargeable period to which the appeal relates.

(8) The participator may at any time, if the Board do not object to his doing so, abandon an appeal instituted by him; and for this purpose he shall notify his desire to do so to the Board who may, within thirty days after being so notified, object by notice in writing to the participator.

(9) Where, at any time between—

(a) the giving of a notice of appeal against the assessment [F34 determination or amendment] or from a decision of the Board on a claim under section 33 of the M8 Taxes Management Act 1970 as applied by paragraph 1 above, and

(b) the determination of the appeal by the Special Commissioners,

the Board and the participator agree [F34 on how the assessment, determination, amendment or decision should be varied or on what assessment or determination should be substituted in relation to the chargeable period in question, the same consequences shall ensue as if the Commissioners had determined the appeal to that effect].

[F35 (10) If, on the appeal, it appears to a majority of the Commissioners present at the hearing that the assessment, determination or amendment is wrong—

(a) because no, or a smaller, assessable profit or a, or a larger, allowable loss has accrued for the chargeable period in question; or

(b) because a, or a larger, assessable profit or no, or a smaller, allowable loss has accrued for that period,

the Commissioners shall vary the assessment, determination or amendment in such manner, or substitute such assessment or determination, as may be required; and it shall be for the participator to satisfy the Commissioners as to any matter within paragraph (a) above.]

(11) Save as otherwise provided by this Schedule (including the provisions applied by paragraph 1 above), [F36 the determination by the Special Commissioners of any appeal] under this Part of this Act shall be final and conclusive.

Textual Amendments

F33 Words inserted by Finance Act 1976 (c. 40), s. 130(3)(4)

F34 Words substituted by Finance Act 1976 (c. 40), s. 130(5)

F35 Sch. 2 para. 14(10) substituted by Finance Act 1976 (c. 40), s. 130(6)

F36 Words substituted by Finance Act 1976 (c. 40), s. 130(7)

Modifications etc. (not altering text)

C16 See Finance Act 1982 (c. 39), s. 142(5)

C17 See Finance Act 1982 (c. 39), Sch. 19 para. 7(2)

C18 Sch. 2 para. 14(2) to apply to Finance Act 1987 (c. 16), ss. 63(6), 66(8) and Sch. 12 para. 3(2)(d) as for appeals against assessments or determinations made under Oil Taxation Act 1975 (c. 22)

C19 See also Petroleum Revenue Tax Act 1980 (c. 1, SIF 63:1), s. 1(5) in relation to chargeable periods ending on or after 31 December 1979

C20 Sch. 2 para. 14(8) to apply to Finance Act 1987 (c. 16), ss. 63(6), 66(8) and Sch. 12 para. 3(2)(d) as for appeals against assessments or determinations made under Oil Taxation Act 1975 (c. 22)

C21 Sch. 2 para. 14(11) to apply to Finance Act 1987 (c. 16), ss. 63(6), 66(8) and Sch. 12 para. 3(2)(d) as for appeals against assessments or determinations made under Oil Taxation Act 1975 (c. 22)

Marginal Citations

M8 1970 c. 9.

Interest on tax U.K.

15 (1) Subject to sub-paragraph (2) below, tax charged in an assessment for a chargeable period shall carry interest at the [F37 rate applicable under section 178 of the Finance Act 1989] from [F38 two months] after the end of the period until payment. U.K.

(2) Nothing in sub-paragraph (1) above shall authorise or require interest to be charged from any time before 30th April 1976.

(3) Where, under paragraph 14(3) above, tax may be withheld until the determination or abandonment of an appeal, the interest on that tax may also be withheld until the determination or abandonment of the appeal.

Textual Amendments

F37 Words substituted by Finance Act 1989 (c. 26), s. 179(1)(4) and S.I. 1989 No. 1298 (C. 44) for periods beginning on or after 18 August 1989

F38 Words substituted by Petroleum Revenue Tax Act 1980 (c. 1, SIF 63:1), s. 2 in relation to tax charged for any period ending on or after 31 December 1979

Modifications etc. (not altering text)

C22 See Finance Act 1982 (c. 39), ss. 139(6), 142(5) and Sch. 19 para. 13(4)

C23 Rates applicable: 12 per cent. for periods after 31 December 1979 by S.I. 1979 No. 1687; 8 per cent. after 30 November 1982 by S.I. 1982 No. 1587; 11 per cent. after 30 April 1985 by S.I. 1985 No. 563; 8.5 per cent. after 5 August 1986 by S.I. 1986 No. 1181; 9.5 per cent. after 5 November 1986 by S.I. 1986 No. 1832; 9 per cent. after 5 April 1987 by S.I. 1987 No. 513; 8.25 per cent. after 5 June 1987 by S.I. 1987 No. 898; 9 per cent. after 5 September 1987 by S.I. 1987 No. 1492; and 8.25 per cent. after 5 December 1987 by S.I. 1987 No. 1988 (for later orders see Part III). See also S.I. 1989 No. 1297 for regulations made and interest rates set under Finance Act 1989 (c. 26), s. 178

16 U.K. [F39 Subject to paragraph 17 below] where any amount of tax charged by an assessment to tax [F40 or paid on account of tax so charged] becomes repayable under any provision of this Part of this Act that amount shall carry interest at the [F41 rate applicable under section 178 of the Finance Act 1989][F42 from—

(a) two months after the end of the chargeable period for which the assessment was made; or

(b) the date on which it was paid,

whichever is the later, until [F43 the order for repayment is issued]].

Textual Amendments

F39 Words inserted by Finance Act 1990 (c. 29, SIF 63:1), s. 121(2)

F40 Words inserted by Petroleum Revenue Tax Act 1980 (c. 1, SIF 63:1), s. 2 in relation to tax charged for any period ending on or after 31 December 1979

F41 Words substituted by Finance Act 1989 (c. 26), s. 179(1)(4) and S.I. 1989 No. 1298 (C. 44) for periods beginning on or after 18 August 1989

F42 Words substituted by Petroleum Revenue Tax Act 1980 (c. 1, SIF 63:1), s. 2 in relation to tax charged for any period ending on or after 31 December 1979

F43 Words substituted by Finance Act 1989 (c. 26), s. 180(2)(a) and (7) which amendment is deemed always to have had effect

Modifications etc. (not altering text)

C24 Rates applicable: 12 per cent. for periods after 31 December 1979 by S.I. 1979 No. 1687; 8 per cent. after 30 November 1982 by S.I. 1982 No. 1587; 11 per cent. after 30 April 1985 by S.I. 1985 No. 563; 8.5 per cent. after 5 August 1986 by S.I. 1986 No. 1181; 9.5 per cent. after 5 November 1986 by S.I. 1986 No. 1832; 9 per cent. after 5 April 1987 by S.I. 1987 No. 513; 8.25 per cent. after 5 June 1987 by S.I. 1987 No. 898; 9 per cent. after 5 September 1987 by S.I. 1987 No. 1492; and 8.25 per cent. after 5 December 1987 by S.I. 1987 No. 1988 (for later orders see Part III). See also S.I. 1989 No. 1297 for regulations made and interest rates set under Finance Act 1989 (c. 26), s. 178

C25 By Petroleum Revenue Tax Act 1980 (c. 1, SIF 63:1), s. 2(3) any alteration in the rate mentioned in Sch. 2 para. 15(1) to apply also to Sch. 2 para. 16

C26 See Finance Act 1982 (c. 39), s. 139(6) and Sch. 19 para. 13(5) in respect of repayments due in respect of the chargeable period ending on 30 June 1983

[F44 17 (1) This paragraph applies where— U.K.

(a) an assessment made on a participator for a chargeable period or an amendment of such an assessment (in this paragraph referred to as “the relevant assessment or amendment”) gives effect to relief under subsection (2) of subsection (3) of section 7 of this Act for one or more allowable losses accruing in a later chargeable period (in this paragraph referred to, in relation to the relevant assessment or amendment, as “the relief for losses carried back”); and

(b) the later chargeable period referred to in paragraph (a) above ends after 30th June 1991; and

(c) an amount of tax becomes repayable to the participator by virtue of the relevant assessment or amendment (whether wholly or partly by reason of giving effect to the relief for losses carried back).

(2) In the following provisions of this paragraph, so much of the repayment of tax referred to in sub-paragraph (1)(c) above as is attributable to giving effect to the relief for losses carried back is referred to as “the appropriate repayment”[F45 and, in relation to the appropriate repayment, the chargeable period for which the relevant assessment or amendment is made is referred to as “the repayment period”].

(3) For the purpose of determining the amount of the appropriate repayment in a case where the relevant assessment or amendment not only gives effect to the relief for losses carried back but also takes account of any other matter (whether a relief or not) which goes to reduce the assessable profit of the period in question or otherwise to reduce the tax payable for that period, the amount of the repayment which is attributable to the relief for losses carried back is the difference between)—

(a) the total amount of tax repayable by virtue of the relevant assessment or amendment; and

(b) the amount of tax (if any) which would have been so repayable if no account had been taken of the relief for losses carried back.

(4) [F46 Subject to sub-paragraph (6) below]Where this paragraph applies, the amount of interest which, by virtue of paragraph 16 above [F47 which is treated as reducing the assessable profit of the repayment period], is carried by the appropriate repayment shall not exceed the difference between—

(a) [F48 the relevant percentage of the amount] of the allowable loss or losses referred to in sub-paragraph (1)(a) above; and

(b) the amount of the appropriate repayment.]

[F49 (5) For the purposes of sub-paragraph (4)(a) above—

(a) where the repayment period ends on or before 30th June 1993, the relevant percentage, in relation to the amount of the loss or losses which is treated as reducing the assessable profit accruing to the participator for that period is 85 per cent.; and

(b) in relation to the amount of the loss or losses which is treated as reducing the assessable profit accruing to the participator for any later repayment period, the relevant percentage is 60 per cent.

(6) If, in order to give effect to the relief for losses carried back, a repayment of APRT falls, or will on the making of a claim fall, to be made with respect to a chargeable period which is the repayment period in relation to the appropriate repayment, the reference in sub-paragraph (4)(b) above to the appropriate repayment shall be construed as a reference to the aggregate of that repayment and the repayment of APRT.

(7) In sub-paragraph (6) above “APRT” means advance petroleum revenue tax paid under Chapter II of Part VI of the M9 Finance Act 1982.]

Textual Amendments

F44 Sch. 2 para. 17 inserted by Finance Act 1990 (c. 29, SIF 63:1), s. 121(2)(3)

F45 Words in Sch. 2 para. 17(2) added (27.7.1993) by 1993 c. 34, ss. 186(2), 195(3)

F46 Words in Sch. 2 para. 17(4) inserted (27.7.1993) by 1993 c. 34, ss. 186(3)(a), 195(3)

F47 Words in Sch. 2 para. 17(4)(a) inserted (27.7.1993) by 1993 c. 34, ss. 186(3)(b), 195(3)

F48 Words in Sch. 2 para. 17(4)(a) substituted (27.7.1993) by 1993 c. 34, ss. 186(3)(b), 195(3)

F49 Sch. 2 para. 17(5)-(7) added (27.7.1993) by 1993 c. 34, ss. 186(4), 195(3)

Marginal Citations

M9 1982 c. 39.

Section 1.

SCHEDULE 3 U.K. Petroleum Revenue Tax: Miscellaneous Provisions

Definition of sale of oil at arm’s length U.K.

1 (1) For the purposes of this Part of this Act a sale of any oil is a sale at arm’s length if, but only if, the following conditions are satisfied with respect to the contract of sale, that is to say— U.K.

(a) the contract price is the sole consideration for the sale;

(b) the terms of the sale are not affected by any commercial relationship (other than that created by the contract itself) between the seller or any person connected with the seller and the buyer or any person connected with the buyer; and

(c) neither the seller nor any person connected with him has, directly or indirectly, any interest in the subsequent resale or disposal of the oil or any product derived therefrom.

(2) Section [F50 839] of the Taxes Act (connected persons) shall apply for the purposes of the preceding sub-paragraph.

Textual Amendments

F50 Figure substituted by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 para. 32

Modifications etc. (not altering text)

C27 Definition applied for purposes of Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 493(3)

Definition of market value of oil U.K.

2 [F51 (1) [F52 Except in the case of light gases] the market value of any oil in any calendar month shall be determined for the purposes of this Part of this Act in accordance with this paragraph [and, accordingly, references in the following provisions of this paragraph to oil do not apply to light gases]. U.K.

(2) Subject to the following provisions of this paragraph, the market value of any oil in a calendar month (in this paragraph referred to as “the relevant month” is the price at which oil of that kind might reasonably have been expected to be sold under a contract of sale satisfying the following conditions—

(a) the contract is for the sale of the oil at arm’s length to a willing buyer;

(b) the contract is for the delivery of the oil at a time in the relevant month;

(c) the contract is entered into within the period beginning at the beginning of the month preceding the relevant month and ending on the middle day of the relevant month or, if the Treasury by order so direct, within such other period as may be specified in the order;

(d) the contract requires the oil to have been subjected to appropriate initial treatment before delivery;

(e) the contract requires the oil to be delivered]—

(i)

in the case of oil extracted in the United Kingdom, at the place of extraction; or

(ii)

in the case of oil extracted from strata in the sea bed and subsoil of the territorial sea of the United Kingdom or of a designated area, at the place in the United Kingdom [F53 or another country] at which the seller could reasonably be expected to deliver it or, if there is more than one such place, the one nearest to the place of extraction;

[F54 (f)] in the case of oil whose market value falls to be ascertained [F55 as in a particular month] for the purposes of paragraph (b) of section 2(4) or paragraph (d) of section 2(5) of this Act or, subject to sub-paragraph (3) below, under paragraph 3 below for the purposes of paragraph (b) or (c) of the said section 2(5), the contract is for the sale of the whole quantity of oil whose market value falls to be ascertained [F55 as in that month] for the purposes of the paragraph in question, and of no other oil.

[F56 and, for the avoidance of doubt, it is hereby declared that the terms as to payment which are to be implied in the contract shall be those which are customarily contained in contracts for the sale at arm’s length of oil of the kind in question][F57 and, for the purposes of paragraph (c) above, the middle day of a month containing an even number of days shall be taken to be the last day of the first half of the month, and the power to make an order under that paragraph shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament].

[F58 (2A) For the purpose of sub-paragraph (2) above, the price of any oil in a calendar month shall be determined, subject to sub-paragraphs (2B) and (2C) below, by taking the average of the prices under actual contracts for the sale of oil of that kind—

(a) which are contracts for the sale of oil by a participator in an oil field or by a company which, for the purposes of section 115(2) of the Finance Act 1984, is associated with such a participator; and

(b) which, subject to sub-paragraph (2B) below, satisfy the conditions in paragraphs (a) to (e) of sub-paragraph (2) above;and

(c) which do not contain terms as to payment which differ from those customarily contained in contracts for the sale at arm’s length of oil of the kind in question.

(2B) For the purposes of sub-paragraph (2A)(b) above, a contract shall be treated as fulfilling the condition in paragraph (c) of sub-paragraph (2) above if it contains provisions under which the price for oil to be delivered in the relevant month either is determined or subject to review in the period relevant for the purposes of that paragraph or is determined by reference to other prices which are themselves determined in that period, being prices for oil to be delivered in the relevant month.

(2C) The average referred to in sub-paragraph (2A) above shall be determined—

(a) by establishing an average price for oil of the kind in question for each business day within the period relevant for the purposes of sub-paragraph (2)(c) above; and

(b) by taking the arithmetic mean of the average prices so established;

and in this sub-paragraph “business day” has the same meaning as in the Bills of Exchange Act 1882.

(2D) If or in so far as the Board are satisfied that it is impracticable or inappropriate to determine for the purposes of sub-paragraph (2) above the price of any oil in a calendar month as mentioned in sub-paragraph (2A) above (whether by virtue of an insufficiency of contracts satisfying the conditions or of information relating to such contracts or by virtue of the nature of the market for oil of the kind in question or for any other reason), that price shall be determined,—

(a) so far as it is practicable and appropriate to do so by reference to such other contracts (whether or not relating to oil of the same kind) and in accordance with the principles in sub-paragraph (2C) above; and

(b) so far as it is not practicable or appropriate to determine it as mentioned in paragraph (a) above, in such other manner as appears to the Board to be appropriate in the circumstances.]

(3) If oil whose market value falls to be ascertained [F55 as in a particular month] under paragraph 3 below for the purposes of paragraph (b) of the said section 2(5) was not all disposed of to the same person, then the market value [F59 at that time] of so much of that oil as was disposed of [F60 in that month] to any one person shall be ascertained in accordance with sub-paragraphs (1) [F55 to (2D)] above as if that were the only oil whose market value fell to be ascertained [F55 as in that month] for those purposes (with sub-paragraph [F61 (2)(f)] above applying accordingly).

[F62 (3A) Where all or any of the oil whose market value falls to be ascertained in accordance with sub-paragraphs (1) and (2) above has been subjected to initial treatment before being disposed of or relevantly appropriated, the appropriate initial treatment referred to in sub-paragraph (2)(a) above shall, as respects that oil, include the whole of that treatment.]

(4) The provisions of sub-paragraphs (2) and (3) above shall apply for the ascertainment of the market value of oil in any case mentioned in paragraph 2(2) of Schedule 2 to this Act as they apply in relation to the corresponding case mentioned in those provisions.

Textual Amendments

F51 Sch. 3 para. 2(1)(2)(a)-(d) and part of (e) substituted for Sch. 3 para. 2(1)(2)(a) and part of (b) by Finance Act 1987 (c. 16), s. 62(3), Sch. 11 para. 1(2)(3) for chargeable periods ending after 31 December 1986

F52 Words in Sch. 3 para. 2(1) inserted (3.5.1994) by 1994 c. 9, s. 236(1), Sch. 23 para. 3(1)(a) (with saving in s. 236(2))

F53 Words in Sch. 3 para. 2(2)(e)(ii) inserted (16.7.1992 with effect in accordance with s. 74(5) of the amending Act) by Finance (No. 2) Act 1992 (c. 48), s. 74, Sch. 15 para. 4(1).

F54 Sch. 3 para. 2(2)(c) renumbered as Sch. 3 para. 2(2)(f) by Finance Act 1987 (c. 16), s. 62(3), Sch. 11 para. 1(4) for chargeable periods ending after 31 December 1986

F55 Words substituted by Finance Act 1987 (c. 16), s. 62(3) and Sch. 11 para. 1 for chargeable periods ending after 31 December 1986

F56 Words added by Finance Act 1983 (c. 49), s. 38

F57 Words added by Finance Act 1987 (c. 16), s. 62(3) and Sch. 11 para. 1 for chargeable periods ending after 31 December 1986

F58 Sch. 3 para. 2(2A)–(2D) inserted by Finance Act 1987 (c. 16), s. 62(3) and Sch. 11 para. 1 for chargeable periods ending after 31 December 1986

F59 Words repealed by Finance Act 1987 (c. 16), ss. 62(3), 72(7), Schs. 11 para. 1(7) and 16 Part X for chargeable periods ending after 31 December 1986

F60 Words inserted by Finance Act 1987 (c. 16), s. 62(3) and Sch. 11 para. 1 for chargeable periods ending after 31 December 1986

F61 Words in Sch. 3 para. 2(3) substituted (3.5.1994) by 1994 c. 9, s. 235(2)

F62 Sch. 3 para. 2(3A) inserted by Finance Act 1980 (c. 48), s. 109(6) in relation to chargeable periods ending after 31 December 1979

Modifications etc. (not altering text)

C28 See Finance Act 1982 (c. 39), s. 134 and Sch. 18; Finance Act 1986 (c. 41), s. 109

C29 See Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 493 (subparagraph (f) replaced where s. 493(3)(4) applies)

C30 See Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 493(5) for modification in certain circumstances

[F63 2A (1) Paragraph 2 above shall have effect in accordance with this paragraph where the oil whose market value falls to be ascertained at any time in accordance with sub-paragraphs [F64 (1) to (2D)] of that paragraph, or in accordance with those sub-paragraphs as modified by sub-paragraph (3) of that paragraph, consists of or includes gas. U.K.

[F65 (1A) Sub-paragraphs (2) and (3) below also apply where the market value of any light gases falls to be ascertained under paragraph 3A below.]

(2) Sub-paragraph [F64 (2)(d)] of paragraph 2 above [F66 or, as the case may require, sub-paragraph (2)(b) of paragraph 3A below] shall not apply to so much of the oil as consists of gas unless—

(a) it has been subjected to initial treatment before being disposed of or relevantly appropriated; or

(b) it has, after being disposed of or relevantly appropriated, been subjected to initial treatment by or on behalf of the participator in question or by or on behalf of a person who is connected with him within the meaning of section [F67 839] of the Taxes Act;

and where oil consisting of gas has, whether before or after being disposed of or relevantly appropriated, been subjected to initial treatment by or on behalf of the participator in question or by or on behalf of a person who is connected with him as aforesaid the appropriate initial treatment referred to in sub-paragraph [F64 (2)(d)] of paragraph 2 above [F66 or, as the case may require, sub-paragraph (2)(b) of paragraph 3A below]shall include the treatment to which it has been so subjected.

(3) Where the initial treatment mentioned in sub-paragraph (2) above includes treatment in order to separate gas of one or more kinds which are transported and sold in normal commercial practice, the market value of the gas of each such kind which is separated shall be ascertained in accordance with sub-paragraphs [F64 (1) to (2D)] of paragraph 2 [F68 or, as the case may require, in accordance with paragraph 3A below] as if that were the only oil whose market value fell to be ascertained at the time in question (with sub-paragraph [F69 (2)(f)]of paragraph 2 applying accordingly).

F70 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F63 Sch. 3 para. 2A inserted by Finance Act 1980 (c. 48), s. 109(7) in relation to chargeable periods ending after 31 December 1979

F64 Words substituted by Finance Act 1987 (c. 16), s. 62(3) and Sch. 11 para. 2 for chargeable periods ending after 31 December 1986

F65 Sch. 3 para. 2A(1A) inserted (3.5.1994) by 1994 c. 9, s. 236(1), Sch. 23 para. 3(2) (with saving in s. 236(2))

F66 Words in Sch. 3 para. 2A(2) inserted (3.5.1994) by 1994 c. 9, s. 236(1), Sch. 23 para. 3(3) (with saving in s. 236(2))

F67 Figure substituted by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 para. 32

F68 Words in Sch. 3 para. 2A(3) inserted (3.5.1994) by 1994 c. 9, s. 236(1), Sch. 23 para. 3(4) (with saving in s. 236(2))

F69 Words in Sch. 3 para. 2A(3) substituted (3.5.1994) by 1994 c. 9, s. 235(2)

F70 Sch. 23 para. 2A(4) repealed (3.5.1994) by 1994 c. 9, ss. 236(1), 258, Sch. 23 para. 3(5), Sch. 26 Pt. VI Note 1 (with saving in s. 236(2))

Modifications etc. (not altering text)

C31 See Finance Act 1982 (c. 39), s. 134 and Sch. 18; Finance Act 1986 (c. 41), s. 109

Aggregate market value of oil for purposes of section 2(5) U.K.

3 (1) For the purposes of subsection (5) of section 2 of this Act the aggregate market value of any oil falling within paragraph (b) or (c) of that subsection shall be arrived at by ascertaining, for each calendar month in the chargeable period in question, the market value [F71 at the material time] of so much, if any, of that oil as was— U.K.

(a) in the case of oil falling within the said paragraph (b), delivered as there mentioned in that month; or

(b) in the case of oil falling within the said paragraph (c), appropriated as there mentioned in that month,

and, in either case, aggregating the market values so ascertained.

(2) In this paragraph and elsewhere in this Part of this Act “calendar month” (where those words are used) means a month of the calendar year, [F71 and “the material time”, in relation to a calendar month, means noon on the relevant day, that is to say—

(a) for a month containing an odd number of days, the middle day of the month;

(b) for a month containing an even number of days, the last day of the first half of the month].

Textual Amendments

F71 Words repealed by Finance Act 1987 (c. 16), ss. 62(3), 72(7), Schs. 11 para. 3 and 16 Part X for chargeable periods ending after 31 December 1986

Modifications etc. (not altering text)

C32 See Finance Act 1982 (c. 39), s. 134 and Sch. 18; Finance Act 1986 (c. 41), s. 109

[F72 Definition of market value of light gases] U.K.

Textual Amendments

F72 SCh. 3: Crossheading and para. 3A inserted (3.5.1994) by 1994 c. 9, s. 236(1), Sch. 23 para. 4 (with saving in s. 236(2))

[F73 3A (1) The market value of any light gases for the purposes of this Part of this Act is the price at which, having regard to all the circumstances relevant to the disposal or appropriation in question, light gases of that kind might reasonably have been expected to be sold under a contract of sale satisfying the conditions specified in sub-paragraph (2) below.

(2) The conditions referred to in sub-paragraph (1) above are that—

(a) the contract is for the sale of the gases at arm’s length to a willing buyer;

(b) the contract requires the gases to have been subjected to appropriate initial treatment before delivery; and

(c) the contract requires the gases to be delivered—

(i) in the case of gases extracted in the United Kingdom, at the place of extraction; or

(ii) in the case of gases extracted from strata in the sea bed and subsoil of the territorial sea of the United Kingdom or of a designated area, at the place in the United Kingdom or another country at which the seller could reasonably be expected to deliver the gases or, if there is more than one such place, the one nearest to the place of extraction.

(3) If the circumstances referred to in sub-paragraph (1) above are such that the price referred to in that sub-paragraph might reasonably be expected to include—

(a) any such payments as are referred to in subsection (2) of section 114 of the Finance Act 1984 (treatment of certain payments relating to gas sales), or

(b) any capacity payments, as defined in subsection (5) of that section,

section 114 of the Finance Act 1984 shall apply accordingly in relation to the notional contract specified in sub-paragraph (1) above as it applies in relation to an actual contract.

(4) This paragraph has effect subject to sub-paragraphs (2) and (3) of paragraph 2A above.]

Textual Amendments

F73 Sch. 3 para. 3A inserted (3.5.1994) by 1994 c. 9, s. 236(1), Sch. 23 para. 4 (with saving in s. 236(2))

Oil delivered in place of royalties to be disregarded for certain purposes U.K.

4 Oil delivered to the Secretary of State under the terms of a licence granted under the M10 Petroleum (Production) Act 1934 shall be disregarded for the purposes of section 2(5) of this Act and for the purposes of the references in section 8(3) and (4) of this Act to a participator’s share of the oil won and saved from an oil field in a chargeable period.

Marginal Citations

M10 1934 c. 36.

Effect of transfer to an associated company of participator’s rights etc. in connection with an oil field or relevant licence U.K.

5 (1) This paragraph applies to any agreement or other arrangement between a participator in an oil field and a company associated with the participator whereby— U.K.

(a) ownership of all or any of the participator’s share of the oil won and saved from the field is transferred to the company; and

(b) the company obtains or assumes all or any of the participator’s other rights, interests and obligations in connection with the field or any relevant licence.

(2) As regards any chargeable period in which a participator in an oil field is a party to an arrangement to which this paragraph applies, the other party to the arrangement shall be treated for all purposes of this Part of this Act (except this paragraph) and for the purposes of [F74 section 500 of the Taxes Act] as having been a participator in the field at all times when the actual participator was such a participator (including times before the arrangement was made), and shall be assessable and chargeable to tax and entitled to make any claim under this Part of this Act, and any deduction or claim under [F74 section 500 of the Taxes Act], accordingly.

(3) Where a participator in an oil field is or has been a party to an arrangement to which this paragraph applies then for all purposes of this Part of this Act—

(a) anything done by or in relation to the participator in connection with the field or any relevant licence shall be treated as being or having been done by or, as the case may be, in relation to the other party to the arrangement; and

(b) all rights, interests or obligations of the participator in connection with the field or any relevant licence shall be treated as being or having been rights, interests or obligations of the other party.

(4) Where a participator in an oil field is or has been a party to an arrangement to which this paragraph applies, then, if any tax or interest payable under this Part of this Act by the other party to the arrangement is not paid within thirty days after the date on which it becomes payable, the Board may by notice in writing require the participator to pay that tax or interest; and where such a notice is served on the participator, the tax or interest in question shall be payable by him forthwith, but without prejudice to the Board’s right to recover it from the other party.

(5) For the purposes of this paragraph “company” means any body corporate, and a participator in an oil field and another company are associated with one another if—

(a) the participator has control over or is under the control of the other company; or

(b) the participator and the other company are both under the control of the same person or persons;

and in this sub-paragraph “control” has the meaning given by section [F75 840] of the Taxes Act.

Textual Amendments

F74 Words substituted (retrospectively) by Finance Act 1990 (c. 29, SIF 63:1), s. 89, Sch. 14 paras. 16, 19

F75 Figure substituted by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 para. 32

Modifications etc. (not altering text)

C33 See Finance Act 1981 (c. 35), s. 128(1) and Sch. 16 para. 14; Finance Act 1982 (c. 39), s. 139(6), Sch. 19 para. 20

Oil owned by a person other than a participator in the oil field from which it was won U.K.

6 (1) Where a proportion of a participator’s share in the oil won and saved from an oil field (as distinct from a specific quantity of oil comprised in that share) is owned by [F76 a person (in this paragraph referred to as “the owner”) who is not a participator and] who acquired it (whether directly or indirectly) under an agreement to which paragraph 5 above does not apply, the following provisions of this paragraph shall have effect. U.K.

(2) For the purposes of this Part of this Act the oil acquired by the owner under the agreement shall be treated in every case as having been disposed of to him by the participator otherwise than in a sale at arm’s length.

(3) Where any oil which the owner owns in right of the agreement is in pursuance of the agreement—

(a) delivered to the owner by the participator; or

(b) delivered to a third person by the participator acting on behalf of the owner,

the delivery shall for the purposes of this Part of this Act be regarded as a delivery by the participator although he does not own the oil.

(4) This sub-paragraph applies to all such oil (if any) as, being owned by the owner in right of the agreement, is in any chargeable period delivered by the participator as mentioned in the preceding sub-paragraph and would accordingly, apart from the following sub-paragraph, fall to be brought into account under section 2(5)(b) of this Act in computing the assessable profit or allowable loss accruing to the participator in that period (in the following sub-paragraph referred to as “the relevant period”).

(5) If on a claim made by the participator within two months after the end of the relevant period—

(a) it is shown that some or all of the oil to which sub-paragraph (4) above applies has been disposed of by or on behalf of the owner crude in sales at arm’s length; and

(b) the Board are satisfied that the oil with respect to which it is so shown includes the whole of so much of the oil to which that sub-paragraph applies as has been so disposed of,

then, in computing the assessable profit or allowable loss accruing to the participator in the relevant period, the oil with respect to which it is so shown shall be brought into account by reference to the price received or receivable for it by the owner instead of by reference to its market value.

Textual Amendments

F76 Words substituted by Finance Act 1977 (c. 36), s. 54(2)

[F77 Effect of certain transactions between participators U.K.

Textual Amendments

F77 Sch. 3 para. 6A inserted by Finance Act 1977 (c. 36), s. 54

6A U.K. Where the whole or part of the share of a participator (“the transferor”) of oil won from an oil field became the share, or part of the share, of another participator (“the transferee”) in pursuance of an agreement between them under which the transferor undertook to remain responsible for carrying out the transferee’s obligations in connection with the field so far as they relate to the transferred share or part, then, for the purposes of this Part of this Act—

(a) the shares of the transferor and the transferee of oil won from the field shall be taken to be the same as they would have been if the transfer had not occurred, and

(b) any oil comprised in the transferred share or part and taken up by or on the authority of the transferee in pursuance of the agreement shall be regarded as being disposed of and delivered to him by the transferor at the time when it is taken up.]

Exclusion from section 2(4)(b) and (5)(d) of offshore oil in transit to place of first landing F78 . . . U.K.

Textual Amendments

F78 Words in the heading to Sch. 3 para. 7 repealed (16.7.1992 with effect in accordance with ss. 55(3),74(5) of the amending Act) by Finance (No. 2) Act 1992 (c. 48), ss. 55(3), 74, 82, Sch. 15 para. 4(2)(a), Sch. 18 Pt. VIII

7 U.K. In computing the assessable profit or allowable loss accruing to a participator in a chargeable period from an oil field, the market value of any oil won as mentioned in section 3(1)(f) of this Act—

(a) shall not be taken into account under section 2(4)(b) of this Act if and to the extent that at the end of the preceding chargeable period the oil was in the course of being transported to the place where it was first landed in the United Kingdom [F79 or to the place referred to in section 3(1)(f)(ii) of this Act]; and

(b) shall not be taken into account under section 2(5)(d) of this Act if and to the extent that at the end of the first-mentioned chargeable period the oil was in the course of being so transported.

Textual Amendments

F79 Words in Sch. 3 para. 7(a) inserted (16.7.1992 with effect in accordance with s. 74(5) of the amending Act) by Finance (No. 2) Act 1992 (c. 48), ss. 74, 82, Sch. 15 para. 4(2)(b).

Certain subsidised expenditure to be disregarded U.K.

8 (1) Expenditure shall not be regarded for any of the purposes of this Part of this Act as having been incurred by any person in so far as it has been or is to be met directly or indirectly by the Crown or by any government or public or local authority, whether in the United Kingdom or elsewhere, or by any person other than the first-mentioned person, [F80 unless it is so met by a grant made under Part I of the M11 Industry Act 1972 or a grant made under an enactment of the Parliament of Northern Ireland or Measure of the Northern Ireland Assembly and declared by order of the Treasury under section 84 of the M12 Capital Allowances Act 1968 to correspond to a grant made under the said Part I]. U.K.

(2) In considering, for the purposes of this paragraph, how far any expenditure has been or is to be met directly or indirectly by the Crown or by any authority or person other than the person incurring the expenditure, there shall be left out of account any insurance or compensation payable in respect of the loss or destruction of any asset.

Textual Amendments

F80 Words repealed by Finance Act 1982 (c. 39), ss. 137(1)(7), 157(6) and Sch. 19 Part IX in respect of relevant expenditure incurred after 9 March 1982 where the grant concerned is paid after that date

Modifications etc. (not altering text)

C34 See Finance Act 1981 (c. 35), s. 118(5)

Marginal Citations

M11 1972 c. 63.

M12 1968 c. 3.

Election to have amounts mentioned in section 2(9)(b) and (c) spread U.K.

[F81 9 (1) A participator in an oil field may by notice in writing to the Board elect— U.K.

(a) that the relief for supplemented expenditure to be taken into account in computing the assessable profit or allowable loss accruing to him from the field in the chargeable period specified in the notice shall not exceed such amount as is so specified; and

(b) that any excess shall be dealt with in accordance with the following provisions of this paragraph.

(2) Subject to sub-paragraphs (3) and (4) below, one-twentieth of any excess of the relief over the amount specified for the chargeable period in question shall be taken into account in computing the assessable profit or allowable loss accruing to the participator from the field in each of the next twenty chargeable periods.

(3) A participator may, in the first notice given by him under sub-paragraph (1) above in respect of a field, elect that sub-paragraph (2) above shall have effect in relation to that and any subsequent notice given by him in respect of that field with the substitution for the denominator of the fraction and the number of chargeable periods of such number, being three, five, ten or fifteen, as is specified in the election.

(4) A participator may by a notice in writing given to the Board and applying to any of the chargeable periods referred to in sub-paragraph (2) above before the last elect that so much of the excess as has not been taken into account in a previous chargeable period shall be taken into account in the period specified in the notice instead of partly in that period and partly in the subsequent periods.

(5) Any notice under this paragraph shall be in such form as the Board may prescribe and shall be given within three months after the end of the chargeable period to which it relates or, if later, twenty-seven months after the end of the first chargeable period of the field.

(6) Any tax charged or repayable in respect of the first four chargeable periods of an oil field in consequence of an election under this paragraph shall not carry interest under paragraph 15 or 16 of Schedule 2 to this Act in respect of any period before the date of the election.

(7) In this paragraph “relief for supplemented expenditure” means the amount attributable to expenditure qualifying for supplement under paragraph (b)(ii) or (c)(ii) of section 2(9) of this Act which would, apart from any election under this paragraph, fall to be taken into account under paragraph (b) or (c) of section 2(9) in computing the assessable profit or allowable loss accruing to the participator from the field in the chargeable period in question; and the reference in this sub-paragraph to the amount attributable to expenditure qualifying for supplement as aforesaid includes the amount attributable to the expenditure itself as well as to the amount calculated by reference to it under the said paragraph (b)(ii) or (c)(ii).]

Textual Amendments

F81 Sch. 3 para. 9 substituted by Finance Act 1981 (c. 35), s. 116(1) in relation to any chargeable period ending after 31 December 1979

[F82 10 U.K. Where a participator has made an election under paragraph 9(1) above the reduction to be made in his case under section 8(1) of this Act for any chargeable period (whether or not that to which the election relates) shall not be greater than it would have been if he had made no such election.]

Textual Amendments

F82 Sch. 3 para. 10 substituted by Finance Act 1981 (c. 35), s. 116(2) in relation to any chargeable period ending after 31 December 1979

Modifications etc. (not altering text)

C35 See Finance Act 1981 (c. 35), s. 117(4)

Restriction of amount of reduction under section 8(1) U.K.

11 U.K. Where—

(a) a claim under Schedule 5 or 6 to this Act is made after the relevant time; and

(b) the reduction which would, apart from this paragraph, fall to be made under subsection (1) of section 8 of this Act for any chargeable period is greater than it would have been if the expenditure and other amounts allowed on the claim had been claimed before and allowed at the relevant time,

then, if the Board so direct, the reduction made under that subsection for that chargeable period shall be only what it would have been if the expenditure and other amounts allowed on the claim had been claimed before and allowed at the relevant time.

In this paragraph “the relevant time” means the end of twelve months from the end of the claim period to which the claim mentioned in sub-paragraph (a) above relates.

Sections 3 and 4.

SCHEDULE 4 U.K. Provisions Supplementary to Sections 3 and 4

Modifications etc. (not altering text)

C36 See Oil Taxation Act 1983 (c. 56), s. 3(6)

Restrictions on expenditure allowable under section 3 or 4 U.K.

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)

C37 See Oil Taxation Act 1983 (c. 56), s. 5(4)

2 [F83 (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 M13 Oil 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 [F84 they are connected within the meaning of section [F85 839] of the Taxes Act].

[F86 (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

F83 Sch. 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)

F84 Words 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

F85 Figure substituted by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 para. 32

F86 Sch. 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)

C38 See Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 495

C39 See Oil Taxation Act 1983 (c. 56), Sch. 2 para. 5 in relation to transactions to which Sch. 4 para. 2 applies

Marginal Citations

M13 1983 c. 56.

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)

C40 See Oil Taxation Act 1983 (c. 56), s. 3(6)

Disposal of long-term asset formerly used in connection with an oil field U.K.

4 (1) Where an asset is used in connection with an oil field in circumstances such that section 4 of this Act applies to any expenditure incurred in acquiring, bringing into existence, or enhancing the value of that asset, then if— U.K.

(a) the asset is disposed of for valuable consideration while in use in that connection or not more than two years after its use in that connection permanently ceases;

(b) the person making the disposal is either a participator in the field or a person connected with a participator;

(c) the person to whom the disposal is made is not a person connected with a participator; and

(d) the amount or value of the consideration received or receivable for the disposal is not less than the price which the asset might reasonably have been expected to fetch if sold in the open market at the time of the disposal,

sub-paragraphs (2) to (4) below shall have effect.

(2) If the disposal occurs without the asset permanently ceasing to be used in connection with the field, its use in that connection shall for the purposes of section 4 of this Act and the following provisions of this paragraph be deemed to have permanently ceased at the time of the disposal.

(3) If the disposal takes place not later than the end of the claim period in which the use of the asset in connection with the field permanently ceases, the proportion of the expenditure allowable under section 4 of this Act for the relevant period (that is to say the period which, in relation to that claim period, is the relevant period for the purposes of subsection (7) of that section) or, if the claim period in question is the first relevant claim period (as defined in that section), the proportion of the expenditure so allowable for that claim period shall be computed under that section subject to the provisions of sub-paragraph (5) below.

(4) If the disposal takes place after the end of the claim period in which the use of the asset in connection with the field permanently ceases, then, as regards the claim period in which the disposal takes place—

(a) subsection (7) of section 4 of this Act shall have effect in relation to the asset as if its use in that connection had permanently ceased in that claim period (but so that for the purposes of subsections (5) and (6) of that section as applied by the said subsection (7) the asset shall not be treated as having been used in that connection at any time when it was not so used); and

(b) the proportion of the expenditure allowable under that section for the relevant period (that is to say the period which, in relation to that claim period is the relevant period for the purposes of the said subsection (7)) shall be computed under that section subject to the provisons of sub-paragraph (5) below.

(5) For the purposes of the computation mentioned in sub-paragraph (3) or (4) above, as the case may be—

(a) the amount of the expenditure incurred in acquiring, bringing into existence, or enhancing the value of the asset which would otherwise fall to be taken into account shall be treated as reduced by the amount or value of the consideration received or receivable for the disposal (or, if equal to or smaller than the amount or value of that consideration, as reduced to nil); and

(b) the asset’s useful life shall be treated as having ended at the time of the disposal or, if the asset permanently ceased to be used in connection with the field before that time and was neither used nor available for use by anyone in the interval between its permanently ceasing to be so used and the time of the disposal, at the time when it permanently ceased to be so used.

(6) In any case where, for different parts of the expenditure incurred in the case of an asset as mentioned in sub-paragraph (1) above, different proportions thereof would be allowable under section 4 of this Act apart from sub-paragraph (5)(a) above (including a case where, for some but not all of that expenditure, the proportion thereof so allowable would be 100 per cent.), the amount or value of the consideration received or receivable for the disposition shall for the purposes of this paragraph be treated as referable to those different parts in such proportions as may be just and reasonable.

(7) Section 4(13) of this Act applies to the preceding provisions of this paragraph; and those provisions shall, with any necessary modifications, apply in relation to a disposal of an interest in an asset as they apply in relation to a disposal of an asset.

(8) Section [F87 839] of the Taxes Act (connected persons) shall apply for the purposes of this paragraph.

Textual Amendments

F87 Figure substituted by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 para. 32

Modifications etc. (not altering text)

C41 See Oil Taxation Act 1983 (c. 56), s. 1(4)

C42 See Oil Taxation Act 1983 (c. 56), s. 5(7)

5 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F88

Textual Amendments

F88 Sch. 4 para. 5 repealed by Oil Taxation Act 1983 (c. 56), s. 15(6) and Sch. 6

Provisions supplementary to section 4(9) of this Act and paragraph 5(2) above U.K.

6 (1) Where in the case of an oil field, the total amount of the expenditure allowable under sections 3 and 4 of this Act on a claim for a claim period— U.K.

(a) is, under one or more of the relevant provisions, reduced to nil; and

(b) would, under one or more of those provisions, have fallen to be reduced by a further amount if the total amount of that expenditure had been sufficient to enable the maximum reduction thereunder to be made,

that further amount shall be apportioned between the participators in proportions corresponding to what for that claim period would be their respective shares of any expenditure falling within section 2(9)(b)(i) of this Act; and in computing the assessable profit or allowable loss accruing to any participator in the earliest chargeable period which ends after the end of that claim period, the aggregate mentioned in section 2(4)(a) of this Act shall be increased by an amount equal to the amount apportioned to him under this paragraph.

(2) In this paragraph “the relevant provisions” means section 4(9) of this Act and paragraph 5(2) above.

Modifications etc. (not altering text)

C43 See Oil Taxation Act 1983 (c. 56), s. 3(6)

Insurance or compensation in respect of loss or destruction of long-term asset formerly used in connection with oil field U.K.

7 (1) Where, in consequence of the loss or destruction at any time within the period mentioned in sub-paragraph (1) of paragraph 4 above of such an asset as is mentioned in that sub-paragraph, any insurance or compensation in respect of the loss or destruction is receivable by a participator in the field or a person connected with a participator, paragraphs 4 and 6 above shall apply as if at that time the person by whom the insurance or compensation is receivable had disposed of the asset or his interest in it for an amount equal to the insurance or compensation. U.K.

(2) Section [F89 839] of the Taxes Act (connected persons) shall apply for the purposes of this paragraph.

Textual Amendments

F89 Figure substituted by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 para. 32

Assets acquired jointly by participators in different oil fields U.K.

8 U.K. Where an asset was acquired jointly by persons who are participators in two or more different oil fields (whether or not any one of those persons is a participator in more than one of those fields), then in determining for the purposes of section 4 of this Act, in the case of any one of those fields, the use which has been, or which it is reasonable to assume will be, made of the asset otherwise than in connection with that field, no regard shall be had to its use or possible use in connection with any other of those fields.

Modifications etc. (not altering text)

C44 See Oil Taxation Act 1983 (c. 56), s. 3(6)

Sections 3 and 4.

SCHEDULE 5 U.K. Allowance of Expenditure (other than Abortive Exploration Expenditure)

Modifications etc. (not altering text)

C45 Sch. 5 excluded by Finance Act 1991 (c. 31, SIF 63:1), s. 108(6).

Claim periods and claims U.K.

1 (1) In relation to any oil field— U.K.

(a) the first claim period is whichever of the following periods the responsible person elects, namely the period ending at the end of June following the determination of the field or the period ending at the end of December following that determination (including, in either case, an unlimited time prior to that determination);

(b) each subsequent claim period is whichever of the following periods the responsible person elects, namely the period of six months or the period of twelve months from the end of the preceding claim period:

Provided that unless and until the responsible person elects the period of six months from the end of any particular claim period, the claim period next after that claim period shall be taken to be the period of twelve months from the end of it.

(2) An election under this paragraph must be made by notice in writing to the Board.

2 (1) A claim under this Schedule for the allowance of any expenditure allowable under section 3 or 4 of this Act for an oil field must be made by the responsible person to the Board and, subject to the provisions of this Part of this Act, must be made in a claim or claims for the claim period in which the expenditure is incurred, but may not be made before the determination of the field or more than six years after the end of the claim period in which the expenditure is incurred.

(2) A claim under this Schedule for the allowance of any expenditure allowable under section 3 or 4 of this Act for an oil field which was incurred by a person before he became a participator in the field must be made in a claim for the claim period in which he became a participator.

(3) A claim under this Schedule shall not include any expenditure allowable under section 3 or 4 of this Act which has been included in a claim under Schedule 6 to this Act.

(4) A claim must state—

(a) what part (if any) of the expenditure is claimed as qualifying for supplement under section 2(9)(b)(ii) of this Act; and

(b) [F90 Subject to paragraph 2A below]the shares in which, in accordance with their respective interests in the oil field, the participators propose to divide between them, for the purposes of paragraph (b) of section 2(9) of this Act, the expenditure allowed on the claim and the amount which will arise under sub-paragraph (ii) of that paragraph if some or all of that expenditure is allowed on the claim as so qualifying.

(5) Where a claim for the allowance of any expenditure under section 4 of this Act for an oil field was made in relation to any asset for the claim period which, in the case of that asset, is the first relevant claim period (as defined in that section), then any claim with respect to that field made under this Schedule for any subsequent claim period must give all such information as is relevant for the purpose of enabling the Board to carry into effect the provisions of that section in relation to that asset.

(6) A claim must be in such form as the Board may prescribe and must include a declaration that all statements contained in it are correct to the best of the knowledge and belief of the person making the claim.

Textual Amendments

F90 Words in Sch. 5 para. 2(4)(b) inserted by Finance Act 1991 (c. 31, SIF 63:1), s. 107(1).

Modifications etc. (not altering text)

C46 See Oil Taxation Act 1983 (c. 56), s. 3(6)

C47 See Finance Act 1982 (c. 39), s. 135(1)(c) in relation to any case where oil was won before the date of determination

C48 See Finance (No. 2) Act 1979 (c. 47), s. 19(4) where more than one rate of uplift applies; Finance Act 1981 (c. 35), s. 111(6)

C49 See Oil Taxation Act 1983 (c. 56), s. 5(7)

[F91 2A (1) This paragraph applies where— U.K.

(a) a claim is made under this Schedule for the allowance of any expenditure which is incurred after 30th June 1991 and is allowable for an oil field by virtue of paragraph (i) or paragraph (j) of subsection (1) of section 3 of this Act (in this paragraph referred to as “the abandonment expenditure”);

(b) a participator (in this paragraph referred to as “the defaulter”) has defaulted on his liability under a relevant agreement to make a payment towards the abandonment expenditure;

(c) at the end of the claim period for which the claim is made, the defaulter still has an interest in the oil field which falls to be taken into account in determining, under paragraph 2(4)(b) above, the shares of each of the participators in the abandonment expenditure;

(d) the participators (other than any who have defaulted as mentioned in paragraph (b) above) have taken all reasonable steps by way of legal remedy to secure that the defaulter meets the whole of the liability referred to in paragraph (b) above and to enforce any guarantee or other security provided in respect of that liability; and

(e) one or more of those participators has paid an amount in or towards meeting the whole or any part of the payment for which the defaulter was liable as mentioned in paragraph (b) above.

(2) For the purposes of this paragraph, a participator is to be regarded as defaulting on his liability to make a payment as mentioned in sub-paragraph (1)(b) above if he has failed to make the payment in full on the date on which it becomes due under the relevant agreement and either—

(a) on the sixtieth day after that due date any of the payment remains unpaid; or

(b) before that sixtieth day the participator’s interest in a relevant licence becomes liable under the relevant agreement to be sold or forfeited, in whole or in part, by reason of his failure to meet his liability.

(3) In this paragraph—

(a) “relevant agreement” has the meaning given by section 104(5)(a) of the Finance Act 1991;

(b) “the sum in default” means so much of the payment referred to in sub-paragraph (1)(b) above as has neither been paid by the defaulter nor met by virtue of any such guarantee or security as is referred to in sub-paragraph (1)(d) above;

(c) the “default payment” means the amount which the qualifying participator has paid as mentioned in sub-paragraph (1)(e) above; and

(d) a “qualifying participator” means a participator who falls within sub-paragraph (1)(e) above and who is not connected with the defaulter, applying section 839 of the Taxes Act (connected persons) for the purposes of this paragraph.

(4) For the purposes of paragraphs 2(4)(b) and 3(1)(c) of this Schedule, there shall be attributed to a qualifying participator (as an addition to the share of the abandonment expenditure referable to his own interest in the oil field) whichever is the less of—

(a) the default payment; and

(b) subject to sub-paragraph (5) below, that portion of the sum in default which, in accordance with the relevant agreement, the qualifying participator is required to meet in the event of a failure by the defaulter to meet his liability to pay in full the payment referred to in sub-paragraph (1)(b) above.

(5) If, in the case of any oil field, there are only two participators and one of them is the defaulter, the portion referred to in sub-paragraph (4)(b) above is the whole.

(6) Where this paragraph applies, account shall, in the first instance, be taken under paragraph 2(4)(b) above of the whole of the defaulter’s interest in the oil field in determining the share of the abandonment expenditure which, apart from sub-paragraph (4) above, is to be attributed to each of the other participators; but the amount of the abandonment expenditure which, apart from this paragraph, would be attributed to the defaulter by reference to his interest in the oil field shall be reduced (or, as the case may be, extinguished) by deducting therefrom any expenditure attributed to the other participators under sub-paragraph (4) above.]

Textual Amendments

F91 Sch. 5 para. 2A inserted by Finance Act 1991 (c. 31, SIF 63:1), s. 107(2).

Modifications etc. (not altering text)

C50 Sch. 5 para. 2A definitions applied by Finance Act 1991 (c. 31, SIF 63:1), s.108(1).

3 (1) The Board shall by notice in writing to the responsible person inform him of their decision on the claim, stating in the notice— U.K.

(a) the amount of the expenditure allowed by them on the claim;

(b) the amount, if any, of that expenditure allowed by them on the claim as qualifying for supplement under section 2(9)(b)(ii) of this Act; and

(c) the shares determined by the Board to be the shares in which, in the opinion of the Board, the amount stated under (a) above or, as the case may be, the aggregate of that amount and an amount equal to the relevant percentage of the amount stated under (b) above, is divisible between the participators for the purposes of section 2(9)(b) of this Act;

and where the decision relates to part only of the expenditure claimed, or claimed as so qualifying, the Board shall give a further notice or notices in relation to the remainder.

(2) In this paragraph “the relevant percentage” means the percentage mentioned in the said section 2(9)(b)(ii).

Modifications etc. (not altering text)

C51 See Finance (No. 2) Act 1979 (c. 47), s. 19(4) where more than one rate of uplift applies; Finance Act 1981 (c. 35), s. 111(6)

C52 See Finance (No. 2) Act 1979 (c. 47), s. 19 where more than one rate of uplift applies

4 U.K. If, in a case where sub-paragraph (5) of paragraph 2 above requires a claim made for a particular claim period to give all such information as is relevant for the purpose there mentioned in relation to an asset, a claim satisfying the requirements of that sub-paragraph is not made within twelve months after the end of that period, then, in carrying into effect the provisions of section 4 of this Act in relation to that asset for that claim period, the Board may proceed according to the best of their judgment, and may make any adjustments under any of the provisions mentioned in paragraph 6(2) of Schedule 4 to this Act accordingly.

Modifications etc. (not altering text)

C53 See Oil Taxation Act 1983 (c. 56), s. 5(7)

Appeals U.K.

5 (1) If— U.K.

(a) the amount or total of the amounts stated under sub-paragraph (1)(a) of paragraph 4 above in the notice or notices given by the Board under that paragraph on a claim, or the amount or total of the amounts so stated under sub-paragraph (1)(b) of that paragraph, is less than the amount claimed; or

(b) the shares so stated under sub-paragraph (1)(c) of that paragraph in the notice or latest of the notices so given differ from the shares stated under paragraph 2(4)(b) above in the claim,

the responsible person may by notice in writing given to the Board not more than three years after the making of the claim appeal to the Special Commissioners; but the bringing of an appeal under this paragraph shall not affect the operation of any notice so given by the Board.

(2) On an appeal against a decision on a claim brought on the ground mentioned in sub-paragraph (1)(b) above, and in any proceedings arising out of such an appeal, any participator in the oil field to which the claim relates shall be entitled to appear and be heard.

(3) An appeal against a decision on a claim may at any time be abandoned by a notice in writing given to the Board by the responsible person.

(4) On an appeal against a decision on a claim, the Special Commissioners may vary the decision appealed against whether or not the variation is to the advantage of all or any of the participators in the oil field to which the claim relates.

Modifications etc. (not altering text)

C54 See Finance (No. 2) Act 1979 (c. 47), s. 19 where more than one rate of uplift applies

6 (1) Where the responsible person gives notice of appeal against a decision on a claim on one or both of the grounds mentioned in paragraph 5(1)(a) above and, before the appeal is determined by the Special Commissioners, the Board and the responsible person agree on— U.K.

(a) the amount of the expenditure that ought to be allowed on the claim; or

(b) the amount, if any, of the expenditure claimed which ought to be so allowed as qualifying for supplement under section 2(9)(b)(ii) of this Act,

the appropriate amount (if any) of the expenditure claimed or, as the case may be, claimed as so qualifying shall be treated for the purposes of this Part of this Act as having been allowed by the Board on the claim, and as having been so allowed on the date on which the notice of appeal was given.

For the purposes of this sub-paragraph the appropriate amount (if any) of the expenditure claimed or, as the case may be, claimed as so qualifying, is an amount thereof equal to the excess, if any, of the amount so agreed on over the corresponding amount or the total of the corresponding amounts allowed by the notice or notices previously given by the Board under paragraph 3 above.

(2) Where the responsible person gives notice of appeal against a decision on a claim on the ground mentioned in paragraph 5(1)(b) above and, before the appeal is determined by the Special Commissioners, the Board and the responsible person agree on the shares in which the amount of any expenditure allowed on the claim, or so allowed as qualifying for supplement under section 2(9)(b)(ii) of this Act, ought to be divided between the participators for the purposes of section 2(9)(b) of this Act, the shares so agreed on shall be deemed to be the shares stated in any notice previously given by the Board under paragraph 3 above on the claim, and shall apply in the case of any part of the expenditure claimed, or claimed as so qualifying, which is by virtue of this or the following paragraph treated as having been allowed on the claim;

(3) Where the Board and the responsible person agree on the matter mentioned in sub-paragraph (1)(a), sub-paragraph (1)(b) or sub-paragraph (2) above in the circumstances there mentioned, the corresponding ground of appeal shall be treated as having been abandoned; and where by virtue of this sub-paragraph all the grounds of the appeal fall to be so treated, the appeal itself shall be treated as having been abandoned.

Modifications etc. (not altering text)

C55 See Finance (No. 2) Act 1979 (c. 47), s. 19 where more than one rate of uplift applies

7 (1) Where on an appeal under paragraph 5 above the Special Commissioners determine that any amount or part of an amount in dispute is allowable under section 3 or 4 of this Act or qualifies for supplement under section 2(9)(b)(ii) of this Act, the following provisions of this paragraph shall apply; U.K.

(2) Subject to paragraph 8(2) below, the said amount or part shall be treated for the purposes of this Part of this Act as having been allowed on the claim to which the appeal relates, and as having been so allowed on the date on which the notice of appeal was given.

(3) There shall be made in any computation made under section 2 of this Act, and in any assessment to tax or determination, all such adjustments as are necessary in consequence of the determination of the Special Commissioners.

Modifications etc. (not altering text)

C56 See Oil Taxation Act 1983 (c. 56), s. 3(6)

C57 See Finance (No. 2) Act 1979 (c. 47), s. 19 where more than one rate of uplift applies

8 (1) Where— U.K.

(a) [F92 an appeal is made under section 56A of the Taxes Management Act 1970 (as applied by paragraph 1 of Schedule 2 to this Act) against]a determination by the Special Commissioners on an appeal under paragraph 5 above; and

(b) in the proceedings on the [F93 appeal so made], or in any proceedings arising out of those proceedings, any matter which was determined by the Special Commissioners on [F94 the appeal under paragraph 5 above] is finally determined otherwise than in accordance with their determination on that appeal,

the following provisions of this paragraph shall apply.

(2) Any expenditure allowable under section 3 or 4 of this Act, which, if the decision of the Board on the claim to which the appeal under paragraph 5 above related had been in accordance with the final determination of that matter, would have been allowed by that decision, or allowed by it as qualifying for supplement under section 2(9)(b)(ii) of this Act, shall be treated for the purposes of this Part of this Act as having been allowed by the Board on the claim to the extent that it has not been previously allowed on the claim, and as having been so allowed to that extent on the date on which the original notice of appeal was given under paragraph 5 above.

(3) There shall be made in any computation made under section 2 of this Act and in any assessment to tax or determination all such adjustments or further adjustments as are necessary in consequence of the final determination.

(4) Any tax which becomes payable in consequence of any adjustment made under sub-paragraph (3) above in an assessment for a chargeable period shall carry interest at the [F95 rate applicable under section 178 of the Finance Act 1989] from [F96 two months] after the end of that period to the date of payment.

(5) For the purposes of this paragraph a matter shall not be deemed to be finally determined in any such proceedings as are mentioned in sub-paragraph (1)(b) above until a determination thereof made in any such proceedings can no longer be varied or overruled by the order of any court.

Textual Amendments

F92 Words in Sch. 5 para. 8(1)(a) substituted (1.9.1994) by S.I. 1994/1813, reg. 2(1), Sch. 1 para. 19(a)

F93 Words in Sch. 5 para. 8(1)(b) substituted (1.9.1994) by S.I. 1994/1813, reg. 2(1), Sch. 1 para. 19(b)(i)

F94 Words in Sch. 5 para. 8(1)(b) substituted (1.9.1994) by S.I. 1994/1813, reg. 2(1), Sch. 1 para. 19(b)(ii)

F95 Words substituted by Finance Act 1989 (c. 26), s. 179(1)(4) and S.I. 1989 No. 1298 (C. 44) for periods beginning on or after 18 August 1989

F96 Words substituted by Petroleum Revenue Tax Act 1980 (c. 1, SIF 63:1), s. 2 in relation to tax charged for any period ending on or after 31 December 1979

Modifications etc. (not altering text)

C58 See Oil Taxation Act 1983 (c. 56), s. 3(6)

C59 A rate of 12 per cent. prescribed by S.I. 1979 No. 1687 was extended to Sch. 5 para. 8(4) by Petroleum Revenue Tax Act 1980 (c. 1, SIF 63:1), s. 2(3) from 1 January 1980, reduced to 8 per cent. by S.I. 1982 No. 1587 from 1 December 1982 and increased to 11 per cent. by S.I. 1985 No. 563 from 1 May 1985. See also S.I. 1989 No. 1297 for regulations made and interest rates set under Finance Act 1989 (c. 26), s. 178

[F97 9 (1) If, within the period of three years commencing with the date on which notice of a decision of the Board under paragraph 3 above was given to the responsible person for an oil field, it appears to the Board that the relevant amount was incorrectly stated in the notice, the Board may before the expiry of that period serve on the responsible Person a notice stating what appears to the Board to be the correct amount (referred to below as “the notice of variation”). U.K.

[F98 (1A) In any case falling within sub-paragraph (1B) below, sub-paragraph (1) above shall have effect—

(a) with the substitution for the words “within the period of three years commencing with” of the words “at any time after”; and

(b) with the omission of the words “before the expiry of that period”.

(1B) The cases referred to in sub-paragraph (1A) above are those where—

(a) the incorrect statement of the relevant amount in the notice of the decision mentioned in sub-paragraph (1) above was an over-statement of that amount; and

(b) that over-statement was, in whole or in part, referable to an error in a statement or declaration made in connection with the claim; and

(c) at least one of the conditions in sub-paragraph (1C) below is fulfilled with respect to that error.

(1C) The conditions referred to in sub-paragraph (1B)(c) above are—

(a) that the error was attributable, in whole or in part, to the fraudulent or negligent conduct of the responsible person or a person acting on his behalf;

(b) that paragraph (a) above does not apply but, on the error coming to the notice of the person by whom the statement or declaration was made or a person acting on his behalf, the error was not remedied without unreasonable delay; and

(c) that paragraph (a) above does not apply but, on the error coming to the notice of any person who subsequently becomes the responsible person, the error was not remedied without unreasonable delay.]

(2) In this paragraph “the relevant amount”, in relation to a notice of a decision on a claim under paragraph 3 above, means any one or more of the following—

(a) the amount of expenditure allowed on the claim;

(b) the amount of that expenditure allowed as qualifying for supplement under section 2(9)(b)(ii) of this Act;

(c) where different percentages were stated in that notice to apply to different parts of that expenditure for the purpose of calculating the supplement, each of those parts of that expenditure.

[F99 (2A) In any case where—

(a) the relevant amount which was incorrectly stated is a part of any expenditure falling within paragraph (c) of sub-paragraph (2) above (in this sub-paragraph referred to as a “paragraph (c) amount”), and

(b) under sub-paragraph (1B)(a) above the question arises whether the incorrect statement was an over-statement,

that question shall be determined by comparing the total amount which, in accordance with the notice of decision containing the incorrect statement, was brought into account under section 2(9)(b)(ii) of this Act with the total amount which would have been so brought into account if the paragraph (c) amounts stated in that notice had been correct]

(3) The responsible person may, by notice in writing given to the Board not more than thirty days after the notice of variation was served on him, appeal to the Special Commissioners against the notice of variation.

(4) A notice of appeal under sub-paragraph (3) shall state the grounds on which the appeal is brought.

(5) An appeal under this paragraph may at any time be abandoned by notice in writing given to the Board by the responsible person.

(6) A notice of variation may be withdrawn at any time before it becomes effective.

(7) In any case where—

(a) the responsible person gives notice of appeal against a notice of variation, and

(b) before the appeal is determined by the Special Commissioners, the Board and the responsible person agree as to what the relevant amount ought to be,

the notice of variation shall have effect subject to such modifications as may be necessary to give effect to that agreement; and thereupon the appeal shall be treated as having been abandoned.

(8) On an appeal against a notice of variation the Special Commissioners may vary the notice, quash the notice or dismiss the appeal; and the notice may be varied whether or not the variation is to the advantage of all or any of the participators in the oil field in question.

(9) Where a notice of variation relating to a decision on a claim becomes effective, the relevant amount shall be taken for the purposes of this Part of this Act as having been reduced or increased, as the case may require, on the date on which notice of the decision was given, by such amount as may be necessary to give effect to that notice, and the Board may make such computations under section 2 of this Act and such assessments or determinations or such amendments of assessments or determinations as may be necessary in consequence of that reduction or increase.

(10) A notice of variation becomes effective for the purposes of this paragraph either—

(a) on the expiry of the period during which notice of appeal against the notice of variation may be given to the Special Commissioners under sub-paragraph (3) above without such notice of appeal being given; or

(b) where such notice of appeal is given, when the notice of variation can no longer be varied or quashed by the Special Commissioners or by the order of any court.

[F100 (11) In a case falling within sub-paragraph (1B) above, this paragraph has effect in relation to notices of decisions of the Board under paragraph 3 above whenever given; and, in any other case, this paragraph has effect in relation to such notices given after 15th March 1983.]]

Textual Amendments

F97 Sch. 5 para. 9 added by Finance Act 1983 (c. 49), s. 40(1)

F98 Sch. 5 para. 9(1A)–(1C) inserted by Finance Act 1990 (c. 29, SIF 63:1), s. 122(2)

F99 Sch. 5 para. 9(2A) inserted by Finance Act 1990 (c. 29, SIF 63:1), s. 122(3)

F100 Sch. 5 para. 11 substituted by Finance Act 1990 (c. 29, SIF 63:1), s. 122(4)

Modifications etc. (not altering text)

C60 See Oil Taxation Act 1983 (c. 56), s. 14 in relation to the re-opening of decisions for claim periods ending on or after 30 June 1982

C61 Sch. 5 para. 9 modified (3.5.1994) by 1994 c. 9, ss. 231, 232(8)(a), 234, Sch. 22 paras. 9(4), 10, 11

Sections 3 and 4.

SCHEDULE 6 U.K. Allowance of Expenditure (other than Abortive Exploration Expenditure) on Claim by Participator

Modifications etc. (not altering text)

C62 Sch. 6 extended with modifications by Finance Act 1991 (c. 31, SIF 63:1), s.108(6).

1 (1) A claim for the allowance of any expenditure allowable under section 3 or 4 of this Act for an oil field may be made to the Board under this Schedule by the participator who incurred it (instead of under Schedule 5 to this Act by the responsible person for that field) if the participator satisfies the Board that, for reasons of trade secrecy, it would be unreasonable for him to have to provide the responsible person with the information necessary for the making of a claim under that Schedule. U.K.

(2) A claim by a participator under this Schedule for the allowance of any such expenditure incurred by him must, subject to the provisions of this Part of this Act, be made in a claim or claims for the claim period in which the expenditure is incurred, but may not be made before the determination of the field or more than six years after the end of the claim period in which the expenditure is incurred.

(3) A claim by a participator under this Schedule for the allowance of any such expenditure incurred by him before he became a participator in the field must be made in a claim for the claim period in which he became a participator.

Modifications etc. (not altering text)

C63 See Oil Taxation Act 1983 (c. 56), s. 3(6)

C64 See Finance Act 1982 (c. 39), s. 135(1)(c) in relation to any case where oil was won before the date of determination

2 The provisions of Schedule 5 to this Act specified in the first column of the following Table shall apply in relation to a claim under this Schedule as they apply in relation to a claim under that Schedule subject to any modifications specified in the second column of that Table and with the substitution, for references to the responsible person, of references to the participator by whom the claim under this Schedule is made and, for references to section 2(9)(b)(ii) of this Act, of references to section 2(9)(c)(ii) of this Act.

Table

Provisions applied	Modifications
Paragraph
2(3)	For the reference to this Schedule substitute a reference to Schedule 5 to this Act.
2(4)	Omit paragraph (b).
2(5)
2(6)
3(1)	Omit paragraph (c).
4
5(1)	Omit paragraph (b).
5(3)
5(4)	For the reference to all or any of the participators substitute a reference to the participator by whom the claim is made.
6(1)
6(3)	Omit the reference to paragraph 6(2).
7
8
9	[F101 Omit sub-paragraph (1C)(c).]

Textual Amendments

F101 Words expressed to be inserted by Finance Act 1990 (c. 29, SIF 63:1), s. 122(5)

Section 5.

SCHEDULE 7 U.K. Allowance of Abortive Exploration Expenditure

1 (1) A claim for the allowance, in connection with an oil field, U.K.

[F102 (a) of any abortive exploration expenditure allowable under section 5 of this Act, or

(b) of any exploration and appraisal expenditure allowable under section 5A of this Act], [F103 or]

[F104 (c) of any research expenditure allowable under section 5B of this Act]

in the case of a participator in that field must be made by the participator to the Board, . . . F105

(2) Where a claim under this Schedule has been made and the participator by whom it was made subsequently discovers that an error or mistake has been made in the claim, he may make a supplementary claim . . . F105

(3) The provisions of Schedule 5 to this Act specified in the first column of the following Table shall apply in relation to a claim under this Schedule as they apply in relation to a claim under that Schedule, subject to any modifications specified in the second column of that Table and with the substitution, for references to the responsible person, of references to the participator by whom the claim under this Schedule is made and, for references to section 3 or 4 of this Act, of references to section 5 [F106 or, as the case may be, section 5A [F107 or section 5B]] of this Act.

Table

Provisions applied	Modifications
Paragraph
2(6)
3(1)	Omit paragraphs (b) and (c).
5(1)	Omit the words from “or the amount” to “(1)(b) of that paragraph” and paragraph (b).
5(3)
5(4)	For the reference to all or any of the participators substitute a reference to the participator by whom the claim is made.
6(1)	For “one or both of the grounds” substitute “ the ground ”, and omit paragraph (b) and the words “or, as the case may be, claimed as so qualifying” (wherever occurring).
6(3)	Omit “sub-paragraph (1)(b) or sub-paragraph (2)”, and for the words from “the corresponding” to “itself” substitute “ the appeal ”.
7	In sub-paragraph (1), omit the words from “or qualifies” to “2(9)(b)(ii) of this Act”.
8	In sub-paragraph (2), omit the words from “or allowed by it” to “section 2(9)(b)(ii) of this Act”.
[F108 9]	[F108 [F109 In sub-paragraph (1C) omit paragraph (c)]. In sub-paragraph (2) omit paragraphs (b) and (c) [F110 omit sub-paragraph (2A)], in sub-paragraph (8) for the reference to all or any of the participators substitute a reference to the participator by whom the claim is made and in sub-paragraph (11) for “after 15th March 1983” substitute “ on or after 17th March 1987 ”.]

Textual Amendments

F102 Sch. 7 para. 1(1)(a)(b) substituted for words by Finance Act 1983 (c. 49), s. 37(2) and Sch. 8 Part II para. 6(1)

F103 Word inserted by Finance Act 1987 (c. 16), s. 64(2) and Sch. 13 Part II para. 5

F104 Sch. 7 para. 1(1)(c) inserted by Finance Act 1987 (c. 16), s. 64(2) and Sch. 13 Part II para. 5

F105 Words repealed by Finance Act 1983 (c. 49), ss. 37(4), 48(5) and Sch. 10 Part III and deemed always to have been omitted

F106 Words inserted by Finance Act 1983 (c. 49), s. 37(2) and Sch. 8 Part II para. 6(2)

F107 Words inserted by Finance Act 1987 (c. 16), s. 64(2) and Sch. 13 Part II para. 5

F108 Words added by Finance Act 1987 (c. 16, SIF 63:1), s. 67

F109 Words inserted by Finance Act 1990 (c. 29, SIF 63:1), s. 122(6)(a)

F110 Words inserted by Finance Act 1990 (c. 29, SIF 63:1), s. 122(6)(b)

Section 6.

SCHEDULE 8 U.K. Allowance of Unrelievable Field Loss

Modifications etc. (not altering text)

C65 See also Finance Act 1982 (c. 39), s. 139(6) and Sch. 19 para. 17 as regards repayment of APRT

Reference and determination of question of abandonment of oil field U.K.

1 U.K. Where it appears to the responsible person for an oil field that the winning of oil from the field has permanently ceased he may by notice in writing given to the Board refer to them for their decision the question whether the winning of oil from that field has permanently ceased.

2 (1) The Board shall, by notice in writing given to the responsible person, inform him of their decision on the question and, if their decision is that the winning of oil has so ceased, shall state the date which they are satisfied is that on which the winning of oil from the field in question ceased. U.K.

(2) The responsible person shall, within one month of his receiving a notice under sub-paragraph (1) above informing him of the Board’s decision, furnish a copy of that notice to every person who was at any time a participator in the field in question.

3 (1) The responsible person may appeal to the Special Commissioners against the Board’s decision by notice in writing given to the Board within three months of his receiving the notice under paragraph 2(1) above informing him thereof. U.K.

(2) An appeal under sub-paragraph (1) above may at any time be abandoned by notice in writing given to the Board by the responsible person.

Claims by participators for allowance of unrelievable field losses U.K.

4 (1) A claim for the allowance, in connection with an oil field, of any unrelievable field loss allowable under section 6 of this Act in the case of a participator in that field must be made by the participator to the Board and must be made within six years of the later of the following dates, that is to say the date of the decision (whether of the Board or on appeal from the Board) that the winning of oil from the oilfield in the case of which the loss accrued has permanently ceased, and the date of the determination under Schedule 1 to this Act of the last-mentioned field.

(2) Where a claim under this Schedule has been made and the participator by whom it was made subsequently discovers that an error or mistake has been made in the claim, he may make a supplementary claim within the time allowed for making the original claim.

(3) The provisions of Schedule 5 to this Act specified in the first column of the Table set out in paragraph 1(3) of Schedule 7 to this Act shall apply in relation to a claim under this Schedule as they apply in relation to a claim under the said Schedule 5, subject to any modifications specified in the second column of that Table and with the substitution, for references to the responsible person, of references to the participator by whom the claim under this Schedule is made, for references to the claiming or allowance of expenditure, of references to the claiming or allowance of an unrelievable field loss and, for references to section 3 or 4 of this Act, of references to section 6 of this Act.

SCHEDULE 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F111 U.K.

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Textual Amendments

F111 Sch. 9 repealed by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 844 and Sch. 31