Capital Allowances Act 1990 (repealed) (c. 1)

Part VII U.K. Scientific Research

Modifications etc. (not altering text)

C1 Pt. 7 modified (8.11.1995) by Atomic Energy Authority Act 1995 (c. 37), Sch. 3 para. 17(1)(2)

[F1 138A Disposal of oil licences etc. U.K.

(1) For the purposes of section 138 where—

(a) a person (“the transferor”) disposes of any interest in an oil licence to another (“the transferee”), and

(b) part of the value of that interest is attributable to any allowable exploration expenditure incurred by the transferor,

that disposal shall be deemed (subject to section 138B) to be a disposal by which an asset representing the allowable exploration expenditure to which that part of the value is attributable ceases to belong to the transferor.

(2) Section 138 shall have effect in relation to the disposal of an interest in an oil licence, to the extent that the disposal is treated by virtue of subsection (1) above as a disposal of an asset representing allowable exploration expenditure, as if the disposal value of the asset were an amount equal to such part of the transferee’s expenditure on acquiring the interest as it is just and reasonable to attribute to the part of the value of that interest that is attributable to the allowable exploration expenditure.

(3) In this section and section 138B references to allowable exploration expenditure are references to any allowable [F2 research and development] expenditure of a capital nature incurred on mineral exploration and access.

(4) In this section and section 138B—

• “foreign oil concession” means any right to search for or win overseas petroleum, being a right conferred or exercisable (whether or not by virtue of a licence) in relation to a particular area;

  “interest” in relation to an oil licence, includes, where there is an agreement which—

  (a)

  relates to oil from the whole or any part of the area to which the licence applies, and

  (b)

  was made before the extraction of the oil to which it relates,

  any entitlement under that agreement to, or to a share of, either that oil or the proceeds of its sale;

• “mineral exploration and access” has the same meaning as in Part IV;

  “oil”—

  (a)

  except in relation to a UK licence, means any petroleum; and

  (b)

  in relation to such a licence, has the same meaning as in Part I of the M1 Oil Taxation Act 1975;

• “oil licence” means any UK licence or foreign oil concession;

  “overseas petroleum” means any petroleum that exists in its natural condition at a place to which neither [F3 Part I of the Petroleum Act 1998] nor the M2 Petroleum (Production) Act (Northern Ireland) 1964 applies;

  “petroleum” has the same meaning as in [F3 Part I of the Petroleum Act 1998]; and

  “UK licence” means a licence within the meaning of Part I of the Oil Taxation Act 1975.]

Textual Amendments

F1 Ss. 138A, 138B inserted (retrospectively) by Finance Act 1996 (c. 8), s. 180(1)

F2 Words in s. 138A(3) substituted (with effect in accordance with s. 68(1)(2) of the amending Act) by Finance Act 2000 (c. 17), Sch. 19 paras. 7, 8

F3 Word in s. 138A(4) substituted (15.2.1999) by Petroleum Act 1998 (c. 17), s. 52(4), Sch. 4 para. 27(4); S.I. 1999/161, art. 2(1)

Marginal Citations

M1 1975 c. 22.

M2 1964 c. 28 (N.I.).