Finance Act 1987

66 Oil allowance: adjustment for final periods. U.K.

(1) For the purposes of this section—

(a) “the final allocation period”, in relation to an oil field, means the chargeable period of that field in which section 8(6)(b) of the principal Act applies (the earliest chargeable period in which oil allowance is subject to “the necessary restriction” in order to confine it within the overall maximum); and

(b) “the penultimate period”, in relation to an oil field, means the chargeable period of that field which immediately precedes the final allocation period;

and any reference in this section to the two final periods is a reference to the final allocation period and the penultimate period.

(2) The following provisions of this section apply if the responsible person gives notice to the Board (in this section referred to as an “apportionment notice”) specifying the manner in which the oil allowance for the field is to be apportioned between the participators in each of the two final periods, being a manner designed—

(a) to produce, so far as practicable, the result specified in subsection (4) below, being a result which, in the circumstances of the case, could not be achieved under section 8(6)(b) of the principal Act; and

(b) to secure that adjustments in a participator’s share of the oil allowance are made in the final allocation period in preference to the penultimate period.

(3) An apportionment notice shall be of no effect unless—

(a) it is given not later than six months after the expiry of the final allocation period; and

(b) not later than the date of the notice the responsible person notifies the Board in accordance with paragraph (b) of subsection (6) of section 8 of the principal Act of the manner in which the necessary restriction, as defined in that subsection, is to be apportioned between the participators; and

(c) it specifies a period for each of paragraphs (a) and (b) of subsection (4) below; and

(d) it contains such information as the Board may prescribe for the purpose of showing how, or to what extent, the apportionment of the oil allowance achieves the result specified in subsection (4) below.

(4) The result referred to in subsection (2) above is that the respective shares of the oil allowance utilised by each of two or more participators specified in the apportionment notice bear to each other the same proportion as their respective shares in oil won and saved from the field and, for this purpose—

(a) a participator’s share of the oil allowance means the total amount of the allowance utilised by him over the period specified for the purpose of this paragraph in the apportionment notice; and

(b) a participator’s share in oil won and saved from the field means the total of the oil included in his share of oil won and saved from the field (as specified in returns under Schedule 2 to the principal Act) over the period specified for the purposes of this paragraph in the apportionment notice, being a period which includes that specified for the purposes of paragraph (a) above.

(5) If the Board are satisfied that an apportionment notice complies with subsections (2) to (4) above, they shall give notice to the responsible person accepting the apportionment notice and, on the giving of that notice—

(a) the apportionment specified in the apportionment notice shall, as respects the two final periods, have effect as if it were the apportionment resulting from section 8(2) of the principal Act; and

(b) all such amendments of assessments to tax and determinations shall be made as may be necessary in consequence of paragraph (a) above.

(6) If the Board are not satisfied that an apportionment notice complies with subsections (2) to (4) above, they shall give notice to the responsible person rejecting the apportionment notice and, where the Board give such a notice, the responsible person may, by notice in writing given to the Board within thirty days after the date of the notice of rejection, appeal to the Special Commissioners against the notice.

(7) Where notice of appeal is given under subsection (6) abvove—

(a) if, at any time after the giving of the notice and before the determination of the appeal by the Commissioners, the Board and the appellant agree that the apportionment notice should be accepted or withdrawn or varied, the same consequences shall ensue as if the Commissioners had determined the appeal to that effect;

(b) if, on the hearing of the appeal, it appears to the majority of the Commissioners present at the hearing that the apportionment notice should be accepted, with or without modifications, they shall allow the appeal and, where appropriate, make such modifications of the apportionment specified in the notice as they think fit; and

(c) where the appeal is allowed, subsection (5) above shall apply as if the apportionment notice (subject to any modifications made by the Commissioners) had been accepted by the Board.

(8) Sub-paragraphs (2), (8) and (11) of paragraph 14 of Schedule 2 to the principal Act shall apply in relation to an appeal against a notice of rejection under subsection (6) above as they apply in relation to an appeal against an assessment or determination made under that Act, construing any reference in those provisions to the participator as a reference to the responsible person by whom notice of appeal is given.

(9) This section applies where the final allocation period ends on or after 30th June 1987.