SCHEDULES

SCHEDULE 19BPetroleum extraction activities: exploration expenditure supplement

Part 2Application and interpretation

Qualifying E&A expenditure

6

(1)

For the purposes of this Schedule “qualifying E&A expenditure”is any expenditure as respects which the following conditions are satisfied.

(2)

Condition 1 is that the expenditure is incurred on or after 1st January 2004.

(3)

Condition 2 is that, for the purposes of Part 6 of the Capital Allowances Act, the expenditure is qualifying expenditure incurred on research and development consisting of oil and gas exploration and appraisal (see section 437(2)(b) of that Act).

(4)

Condition 3 is that an allowance under section 441 of that Act is claimed in respect of the expenditure.

(5)

Condition 4 is that the expenditure is incurred in the course of oil extraction activities.

(6)

Condition 5 is that—

(a)

those oil extraction activities are comprised in a ring fence trade, or

(b)

after incurring the expenditure, the person incurring it sets up and commences a ring fence trade connected with the research and development.