PART I U.K. PETROLEUM REVENUE TAX

Modifications etc. (not altering text)

C1 See Finance Act 1986 (c. 41), s. 109(6); Advance Petroleum Revenue Tax Act 1986 (c. 68, SIF 63:1), s. 2(2)

Part I (ss. 1-12) applied (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 199(7)(c), 289 (with ss. 60, 101(1), 171, 201(3)).

Part I (ss. 1-12) applied (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 276(5), 289 (with ss. 60, 101(1), 171, 201(3)).

C2 Part I (ss. 1-12) construed (16.7.1992) with s. 74 of Finance (No. 2) Act 1992 c. 48 by s. 74(6) of that 1992 Act.

Part I (ss. 1-12) construed (27.7.1993) with Pt. III (other than s. 194), of 1993 c. 34 by s. 195(3) of that 1993 Act.

Pt. I (ss. 1-12) construed (3.5.1994) with Pt. V of 1994 c. 9 by s. 257(2) of that 1994 Act

Pt. I (ss. 1-12) construed (27.7.1999) with ss. 95-97 by 1999 c. 16, s. 97(7)

Pt. I (ss. 1-12) construed (27.7.1999) with s. 98(7)(8) by 1999 c. 16, s. 98(7)

Pt. I (ss. 1-12) construed (11.5.2001) with s. 102(5)-(10) of 2001 c. 9 by s. 102(11) of that Act

Pt. I (ss. 1-12) construed (retrospective to 7.3.2001) with Sch. 32 of 2001 c. 9 by s. 101(4)(5), Sch. 32 para. 11 of that Act

12 Interpretation of Part I. U.K.

(1) In this Part of this Act—

• “calendar month” (where those words are used) [F1 has] the meaning given by paragraph 3(2) of Schedule 3 to this Act;

• “chargeable period”, in relation to an oil field, has the meaning given by section 1(3) of this Act;

• “claim period”, in relation to an oil field, has the meaning given by paragraph 1 of Schedule 5 to this Act; “crude”, where the reference is to oil being disposed of or appropriated crude, refers to its being so dealt with without having been refined (whether or not it has previously undergone initial treatment); “determination”, in a context relating to an assessment or determination on or in relation to a participator, means a determination under Schedule 2 to this Act that a loss is allowable to him or that neither an assessable profit nor an allowable loss has accrued to him;

• “initial storage”, in relation to oil won from an oil field, means the storage in the United Kingdom, the territorial sea thereof or a designated area of a quantity of oil won from the field not exceeding, in the case of storage in the United Kingdom, a quantity equal to ten times the maximum daily production rate of oil for the field as planned or achieved (whichever is the greater), but does not include—

(a) the storing of oil as part of or in conjunction with the operation of an oil refinery; or

(b) deballasting; or

(c) conveying oil in a pipe-line;

• “initial treatment”, in relation to oil won from an oil field, means the doing, at any place in the United Kingdom, the territorial sea thereof or a designated area, of any of the following things, that is to say—

(a) subjecting oil won from the field to any process of which the sole purpose is to enable the oil to be safely stored, safely loaded into a tanker or safely accepted by an oil refinery; or

[F2 (b) separating oil so won and consisting of gas from other oil so won; or

(c) separating oil so won and consisting of gas of a kind that is transported and sold in normal commercial practice from other oil so won and consisting of gas; or

(d) liquifying oil so won and consisting of gas of such a kind as aforesaid for the purpose of transporting it; or

(e) subjecting oil so won to any process of which the purpose is to secure that oil disposed of crude has the quality that is normal for oil so disposed of from the field,]

but does not include—

(i) the storing of oil even where this involves the doing to the oil of things within [F3 any of paragraphs (a) to (e) of this definition] or

[F4 (ii) any activity carried on as part of, or in association with, the refining of oil not consisting of gas or any activity the sole or main purpose of which is to achieve a chemical reaction in respect of oil consisting of gas; or]

(iii) deballasting;

• “land” includes land in the United Kingdom covered with water;

• “licence” means a licence under the M1 Petroleum (Production) Act 1934 or the M2 Petroleum (Production) Act (Northern Ireland) 1964 authorising the winning of oil, and “licensed area” shall be construed accordingly;

• “licensee” means—

(a) the person entitled to the benefit of a licence or, where two or more persons are entitled to the benefit of a licence, each of those persons; and

(b) a person who has rights under an agreement which is approved by the Board and is certified by the Secretary of State to confer on that person rights which are the same as, or similar to, those conferred by a licence;

• “oil” has the meaning given by section 1(1) of this Act;

• “oil field” shall be construed in accordance with Schedule 1 to this Act;

• “participator” (except in paragraph 4 of Schedule 2 to this Act) means, in relation to an oil field and any chargeable period—

(a) a person who is or was at any time in that chargeable period a licensee in respect of any licensed area then wholly or partly included in the field; and

(b) a person who is no longer a licensee in respect of any licensed area wholly or partly included in the field, but who was such a licensee at any time in either of the two chargeable periods preceding that chargeable period; and

(c) a person who is no longer a licensee in respect of any licensed area wholly or partly included in the field (and who does not fall within paragraph (b) of this definition), but who has or had at any time in that chargeable period a share of oil won (whether or not in that period) from the field, being a share with respect to any part of which either of the following conditions is or was satisfied at that time, that is to say—

(i) he has or had neither disposed of that part nor relevantly appropriated it; or

(ii) he has or had disposed of, but not delivered, that part;

• “pipe-line” means a pipe-line as defined in section 65 of the M3 Pipe-lines Act 1962;

• “production purposes”, in relation to an oil field, means any of the following purposes, that is to say—

(a) carrying on drilling or production operations within the field; or

(b) in the case of oil won from the field that was so won from strata in the sea bed and subsoil of either the territorial sea of the United Kingdom or a designated area, pumping it to the place where it is first landed in the United Kingdom [F5 or to the place in the United Kingdom at which the seller in a sale at arm’s length could reasonably be expected to deliver it or, if there is more than one place at which he could reasonably be expected to deliver it, the one nearest to the place of extraction]; or

(c) the initial treatment of oil won from the field;

• [F6 “refining”, in relation to oil, does not include subjecting it to initial treatment and “refined” and “refinery” shall be construed accordingly;];

• “relevant licence”, in relation to a participator in an oil field, means any licence held or previously held by him in respect of a licensed area wholly or partly included in the field;

• “relevantly appropriated”, in relation to oil won from an oil field, means appropriated to refining or to any use except use for production purposes [F7 in relation to that or any other oil field], and “relevant appropriation” shall be construed accordingly;

• “the responsible person”, in relation to an oil field, has the meaning given by paragraph 4 of Schedule 2 to this Act;

• “royalty”, in relation to a participator in an oil field, means royalty payable (but not, it is hereby declared, oil delivered) to the Secretary of State under any relevant licence;

• “tax” or “the tax” means petroleum revenue tax.

(2) In this Part of this Act any reference to the use of an asset in connection with an oil field is a reference to its use in connection with that field for one or more of the purposes mentioned in section 3(1) of this Act (excluding section 3(1)(b)).

(3) In this Part of this Act any reference (however worded) to the doing of anything in a chargeable period in connection with an oil field or with oil won from an oil field shall, [F8 as regards the first chargeable period for any oil field], be construed as including the doing of that thing in connection with the area of the field as subsequently determined under Schedule 1 to this Act or, as the case may be, with oil won from that area.

(4) In so far as a person is a participator in an oil field by virtue of a licence under the M4 Petroleum (Production) Act (Northern Ireland) 1964, references in this Part of this Act to the Secretary of State (except references in Schedule 1) shall be construed in his case as references to the Department of Commerce for Northern Ireland.

Textual Amendments

F1 Word substituted by Finance Act 1987 (c. 16), s. 62(3) and Sch. 11 para. 5 for chargeable periods ending after 31 December 1986

F2 Paragraphs (b)–(e) substituted for paragraph (b) by Finance Act 1980 (c. 48), s. 109(2)(3) in relation to chargeable periods ending after 31 December 1979

F3 Words substituted by Finance Act 1980 (c. 48), s. 109(2)(3) in relation to chargeable periods ending after 31 December 1979

F4 Paragraph (ii) substituted by Finance Act 1980 (c. 48), s. 109(4) in relation to chargeable periods ending after 31 December 1979

F5 Words inserted by Finance (No. 2) Act 1979 (c. 47), s. 20(1) in relation to expenditure claimed after 31 December 1978

F6 Definitions inserted by Finance Act 1980 (c. 48), s. 109(5) in relation to chargeable periods ending after 31 December 1979

F7 Words inserted by Finance Act 1983 (c. 49), s. 39, deemed to be effective for chargeable periods ending after 31 December 1977

F8 Words repealed by Finance Act 1982 (c. 39), ss. 135(4), 157 and Sch. 22 Part IX in relation to determinations made after 31 December 1981

Modifications etc. (not altering text)

C3 S. 12 applied (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 197(1), 289 (with ss. 60, 101(1), 171, 201(3))

C4 Definition of “chargeable period” employed for purposes of Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 500

C5 Definitions of “initial storage” and “initial treatment”: see Oil Taxation Act 1983 (c. 56), Sch. 1 para. 1(4) in relation to expenditure on associated assets used in connection with an external field

C6 Definitions of “initial storage”, “oil field” and “participator” applied for purposes of Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 502

C7 Definitions of “licence”, “licensee” and “oil” applied for purposes of Finance Act 1988 (c.39, SIF 63:1,2), ss. 62–64

C8 Definition of “relevantly appropriated”: see Oil Taxation Act 1983 (c. 56), Sch. 2 para. 12(2)(b) in relation to oil purchased at place of extraction

C9 Definition of “relevant appropriation” applied for purposes of Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 493(2)

C10 The Department of Commerce for Northern Ireland to be construed as the Department of Economic Development by S.I. 1982 No. 846 (N.I. 11) from 6 September 1982 by N.I. Order 1982 No. 221 (C. 4)

Marginal Citations

M1 1934 c. 36.

M2 1964 c. 28 (N.I.)

M3 1962 c. 58.

M4 1964 c. 28 (N.I.)