C12C13C11 PART I PETROLEUM REVENUE TAX
Pt I 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), 276(5), 289 (with ss. 60, 101(1), 171, 201(3)).
Pts. I III modified by Oil Taxation Act 1983 (c. 56), s. 6A (as inserted (22.7.2004) by Finance Act 2004 (c. 12), s. 285(3))
C12 Assessable profits and allowable losses.
C21
For the purposes of the tax the assessable profit or allowable loss accruing to a participator in any chargeable period from an oil field shall be computed in accordance with the following provisions of this section.
2
The assessable profit or allowable loss so accruing in the period is the difference (if any) between the sum of the positive amounts for the period and the sum of the negative amounts for the period; and that difference (if any) is an assessable profit if the sum of the positive amounts is greater than the sum of the negative amounts, and is otherwise an allowable loss.
3
For the period—
a
the positive amounts for the purposes of this section are the following (as defined in this section), namely the gross profit (if any) accruing to the participator in the period, his licence credit (if any) for the period, and any amount to be credited to him for the period in respect of expenditure; and
b
the negative amounts for those purposes are the following (as so defined) namely the gross loss (if any) so accruing, his licence debit (if any) for the period, and any amount to be debited to him for the period in respect of expenditure.
4
F1For the purposes of the tax (including advance petroleum revenue tax) the gross profit or loss (if any) accruing to the participator in the period is the difference (if any) between—
a
the aggregate of the amounts mentioned in subsection (5) below; and
C3b
one-half of the market value, F22on the last business day of the preceding chargeable period, of so much of his share of oil won from the field as he had F2at the end of that period either—
i
not disposed of and not relevantly appropriated; or
ii
disposed of but not delivered,
and the difference (if any) is a gross profit if the said aggregate is greater than one-half of the said market value, and is otherwise a gross loss.
5
F3Subject to F20subsections (5A) and (5B) below the amounts referred to in subsection (4)(a) above are—
a
the price received or receivable for so much of any oil won from the field and disposed of by him crude in sales at arm’s length as was delivered by him in the period (excluding oil delivered before 13th November 1974);
b
the aggregate market value, ascertained in accordance with Schedule 3 to this Act, of so much of any oil F4(not being light gases) so won and disposed of by him crude otherwise than in sales at arm’s length as was delivered by him in the period (excluding oil delivered before 13th November 1974);
c
the aggregate market value, ascertained in accordance with Schedule 3 to this Act, of so much of any oil F4(not being light gases) so won as was relevantly appropriated by him in the period without being disposed of (excluding oil so appropriated before 13th November 1974); and
F5ca
the market value, ascertained in accordance with paragraph 3A of Schedule 3 to this Act, of so much of any light gases so won and disposed of by him otherwise than in sales at arm’s length as was delivered by him in the period; and
cb
the market value, ascertained in accordance with paragraph 3A of Schedule 3 to this Act, of so much of any light gases so won as was relevantly appropriated by him in the period without being disposed of; and
C3d
one-half of the market value, F23on the last business day of the period, of so much of his share of oil so won as he had F2at the end of that period either—
i
not disposed of and not relevantly appropriated; or
ii
disposed of but not delivered F6and
F7e
the excess of the nominated proceeds for that period, as defined in section 61 of the Finance Act 1987.
C14F85A
In any case where F9oil is disposed of in a sale at arm’s length and the terms of the contract are such that the seller is required to transport the F10oil from a place on land in the United Kingdom F11or another countryF24, or from its place of extraction (where that is in the territorial sea of the United Kingdom or a designated area), for delivery at another place in or outside the United Kingdom or to meet some or all of the costs of or incidental to its transportation from and to such places then, for the purposes of this Part of this Act—
a
the price received or receivable for the F10oil shall be deemed to be that for which it would have been sold, and
b
the F10oil shall be deemed to be delivered at the time it would have been delivered,
if the terms of the contract F12did not require the seller to meet any such costs as are mentioned above but did require the F10oil to be delivered—
i
in the case of F10oil extracted in the United Kingdom, at the place of extraction; or
ii
in the case of F10oil 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 F13or, in the case of oil first landed in another country, at the place in that or any other countryat 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.
F215B
The Board may by regulations make provision for the purposes of subsection (5)(a) to (c) for determining to which fields and in what proportions blended oil to which subsection (5C) applies is attributable.
5C
This subsection applies to blended oil within the meaning of section 63(1A) of the Finance Act 1987 (other than light gases) which—
a
is not gaseous at a temperature of 15 degrees Centigrade and a pressure of one atmosphere, and
b
is not normally disposed of crude by deliveries in quantities of 25,000 metric tonnes or less.
5D
Regulations under subsection (5B)—
a
may apply generally or only to specified cases or circumstances,
b
may make different provision for different cases or circumstances,
c
may make incidental, consequential, or transitional provision,
d
shall be made by statutory instrument, and
e
may not be made unless a draft has been laid before and approved by resolution of the House of Commons.
6
The participator’s licence debit or credit (if any) for the period is the difference (if any) between—
a
the sum of the amounts mentioned in subsection (7) below; and
b
the sum of—
i
the amount taken into account under paragraph (a) of that subsection in computing his licence debit or credit for the preceding chargeable period; and
ii
the amount of any royalty repaid to the participator in the period in respect of the field;
and that difference (if any) is a licence debit if the sum mentioned in paragraph (a) above is greater than the sum mentioned in paragraph (b) above, and is otherwise a licence credit.
7
The amounts referred to in subsection (6)(a) above are—
a
the amount shown in the return for the period made under paragraph 2 of Schedule 2 to this Act as the amount of royalty payable for the period in respect of the participator’s share of oil won from the field;
b
the amount of royalty paid in the period in respect of that share; and
c
any amount paid in the period in respect of any periodic payment payable to the Secretary of State under any relevant licence otherwise than by way of royalty.
C4F258
The amount (if any) to be debited or credited to the participator for the period in respect of expenditure is the sum of the amounts mentioned in subsection (9) below.
C59
F14Subject to section 192 of the Finance Act 1993 the amounts referred to in subsection (8)(a) above are—
F26a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C6b
the participator’s share, as determined on a claim under Schedule 5 to this Act, of the aggregate of—
C7i
any expenditure allowable under section 3 or 4 of this Act for the field which has been allowed on such a claim before the Board have made an assessment to tax or a determination on or in relation to him for the period in respect of the field; and
C8C9ii
an amount equal to F1535 per cent. of so much of that expenditure as has been so allowed on such a claim as qualifying for supplement under this sub-paragraph by virtue of subsection (5) of the said section 3,
so far as that share has not been taken into account in any previous assessment to tax or determination;
C6c
the aggregate of—
C7i
any expenditure allowable in the case of the participator under section 3 or 4 of this Act which has, on a claim made by him under Schedule 6 to this Act, been allowed before the Board have made an assessment to tax or a determination on or in relation to him for the period in respect of the field; and
C8C9ii
an amount equal to F1535 per cent. of so much of that expenditure as has been so allowed on such a claim as qualifying for supplement under this sub-paragraph by virtue of subsection (5) of the said section 3,
so far as that expenditure and amount have not been taken into account in any previous assessment to tax or determination;
d
any abortive exploration expenditure allowable in the case of the participator under section 5 of this Act which on a claim made by him under Schedule 7 to this Act has been allowed under that Schedule before the Board have made an assessment to tax or a determination on or in relation to him for the period in respect of the field, so far as that expenditure has not been taken into account in any previous assessment to tax or determination; and
e
any unrelievable field losses allowable in the case of the participator under section 6 of this Act which on a claim made by him under Schedule 8 to this Act have been allowed under that Schedule before the Board have made an assessment to tax or a determination on or in relation to him for the period in respect of the field, so far as those losses have not been taken into account in any previous assessment to tax or determination F16; and
F17f
any exploration and appraisal expenditure allowable in the case of the participator under section 5A of this Act which, on a claim made by him under Schedule 7 to this Act, has been allowed under that Schedule before the Board have made an assessment to tax or a determination on or in relation to him for the period in respect of the field, so far as that expenditure has not been taken into account in any previous assessment to tax or determinationF18; and
F19g
any research expenditure allowable in the case of the participator under section 5B of this Act which, on a claim made by him under Schedule 7 to this Act, has been allowed under that Schedule before the Board have made an assessment to tax or a determination on or in relation to him for the period in respect of the field, so far as that expenditure has not been taken into account in any previous assessment to tax or determination.
F2710
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F27C1011
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Pt. I construed as one with the following enactments: Finance Act 1986 (c. 41), s. 109 (see s 109(6)); Advance Petroleum Revenue Tax Act 1986 (c. 68, SIF 63:1) (see s. 2(2)); Finance (No. 2) Act 1992 (c. 48), s. 74 (by s. 74(6)); Finance Act 1993, Pt. III (other than s. 194) (see s. 195(3)); Finance Act 1994 (c. 9), Pt. V (see s. 257(2)); Finance Act 1999 (c. 16), ss. 95-98 (see ss. 97(7), 98(7)); Finance Act 2001 (c. 9), Sch. 32 (see s. 101(4)(5), Sch. 32 para. 11)