SCHEDULES
SCHEDULE 19CPetroleum extraction activities: ring fence expenditure supplement
Part 3Pre-commencement supplement
Supplement in respect of a pre-commencement accounting period
9
1
If—
a
a qualifying company incurs qualifying pre-commencement expenditure in respect of a ring fence trade, and
b
the expenditure is incurred before the commencement period,
the company may claim supplement under this Part of this Schedule (“pre-commencement supplement”) in respect of one or more pre-commencement periods.
2
Any pre-commencement supplement allowed on a claim in respect of a pre-commencement period is to be treated as expenditure—
a
which is incurred by the company in the commencement period, and
b
which is allowable as a deduction in calculating the profits of the ring fence trade for that period.
3
The amount of the supplement for any pre-commencement period in respect of which a claim under this paragraph is made is the relevant percentage for that period of the reference amount for that period.
4
If the pre-commencement period is a period of less than twelve months, the amount of the supplement for the period (apart from this sub-paragraph) is to be reduced proportionally.
5
Paragraphs 10 to 13 have effect for the purpose of determining the reference amount for a pre-commencement period.
The mixed pool of qualifying pre-commencement expenditure and supplement previously allowed
10
1
For the purpose of determining the amount of any pre-commencement supplement, a qualifying company is to be taken to have had, at all times in the pre-commencement periods of the company, a continuing mixed pool of—
a
the relevant amount (if any) which the company carries forward under Schedule 19B,
b
qualifying pre-commencement expenditure, and
c
pre-commencement supplement.
2
The pool is to be taken to have consisted of—
a
the relevant amount (if any) which the company carries forward under Schedule 19B,
b
the company's qualifying pre-commencement expenditure, allocated to the pool for each pre-commencement period in accordance with sub-paragraph (3), and
c
the company's pre-commencement supplement, allocated to the pool for each pre-commencement period in accordance with sub-paragraph (4).
3
To allocate qualifying pre-commencement expenditure to the pool for any pre-commencement period, take the following steps—
a
Step 1: count as eligible expenditure for that period so much of the qualifying pre-commencement expenditure mentioned in paragraph 9(1) as was incurred in that period,
b
Step 2: find the total of all the eligible expenditure for that period (amount E),
c
Step 3: if paragraph 11 applies, reduce amount E in accordance with that paragraph,
d
Step 4: if paragraph 12 applies, reduce (or, as the case may be, further reduce) amount E in accordance with that paragraph,
and so much of amount E as remains after making those reductions is to be taken to have been added to the pool in that period.
4
If any pre-commencement supplement is allowed on a claim in respect of a pre-commencement period, the amount of that supplement is to be taken to have been added to the pool in that period.
5
In this paragraph references to the relevant amount (if any) which the company carries forward under Schedule 19B are to the amount in its mixed pool for the purposes of Part 3 of Schedule 19B immediately before 1st January 2006.
Reduction in respect of disposal receipts under the Capital Allowances Act
11
1
This paragraph applies in the case of the qualifying company if—
a
it incurs qualifying pre-commencement expenditure in respect of a ring fence trade in any pre-commencement period,
b
it would, on the relevant assumption, be entitled to an allowance under any provision of the Capital Allowances Act in respect of that expenditure,
c
an event occurs in relation to any asset representing the expenditure in any pre-commencement period, and
d
the event would, on the relevant assumption, require a disposal value (the “deductible amount”) to be brought into account under any provision of the Capital Allowances Act for any pre-commencement period.
2
The relevant assumption is that the company was carrying on the ring fence trade—
a
when the expenditure was incurred, and
b
when the event giving rise to the disposal value occurred.
3
For the purpose of allocating qualifying pre-commencement expenditure to the pool for each pre-commencement period—
a
find the total amount of the disposal values in the case of all such events (amount D), and
b
taking later periods before earlier periods, reduce (but not below nil) amount E for any pre-commencement period by setting against it so much of amount D as does not fall to be set against amount E for a later pre-commencement period.
Reduction in respect of unrelieved group ring fence profits
12
1
This paragraph applies if there is an amount of unrelieved group ring fence profits for a pre-commencement period.
2
For the purpose of allocating qualifying pre-commencement expenditure to the pool for that period—
a
find so much (if any) of amount E for that period as remains after any reduction falling to be made under paragraph 11, and
b
reduce that amount (but not below nil) by setting against it a sum equal to the aggregate of the amounts of unrelieved group ring fence profits for the period.
The reference amount for a pre-commencement period
13
For the purposes of this Part of this Schedule, the reference amount for a pre-commencement period is the amount in the pool at the end of the period—
a
after the addition to the pool of any qualifying pre-commencement expenditure allocated to the pool for that period in accordance with paragraph 10(3), but
b
before determining, and adding to the pool, the amount of any pre-commencement supplement claimed in respect of the period.
Claims for pre-commencement supplement
14
1
Any claim for pre-commencement supplement in respect of a pre-commencement period must be made as a claim for the commencement period.
2
Paragraph 74 of Schedule 18 to the Finance Act 1998 (company tax returns etc: time limit for claims for group relief) applies in relation to a claim for pre-commencement supplement as it applies in relation to a claim for group relief.