Finance Act 1993

185 Abolition of PRT for oil fields with development consents on or after 16th March 1993. U.K.

[F1 (A1) In this Part of this Act—

• “non-taxable field” means an oil field which meets the conditions in subsection (1), (1ZA) or (1A), and

• “taxable field” means an oil field which is not a non-taxable field.]

(1) [F2 An oil field meets the conditions in this subsection if it is an oil field—]

(a) for no part of which consent for development was granted to a licensee by the Secretary of State before 16th March 1993; and

(b) for no part of which a programme of development was served on a licensee or approved by the Secretary of State before that date;

F3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F4 (1ZA) An oil field meets the conditions in this subsection if—

(a) the field does not meet the conditions in subsection (1), and

(b) an election under [F5 Schedule 20B] that the field is to be non-taxable is in effect.]

[F6 (1A) An oil field meets the conditions in this subsection if—

[F7 (za) the field does not meet the conditions in subsection (1),]

(a) the Secretary of State has at any time approved one or more abandonment programmes under Part 4 of the Petroleum Act 1998 (or Part 1 of the Petroleum Act 1987) in relation to all assets of the field which are relevant assets;

(b) those programmes have been carried out to the satisfaction of the Secretary of State;

(c) a development decision is made in relation to the field; and

(d) that decision is made on or after 16th March 1993 and after those programmes have been so carried out.

(1B) For the purposes of subsection (1A)(a) above, an asset is a relevant asset of an oil field if—

(a) it has at any time been a qualifying asset (within the meaning of the 1983 Act) in relation to any participator in the field; and

(b) it has at any time been used for the purpose of winning oil from the field.

(1C) For the purposes of subsection (1A)(c) and (d) above, a development decision is made in relation to an oil field when—

(a) consent for development is granted to a licensee by the [F8 OGA] in respect of the whole or part of the field; or

(b) a programme of development is served on a licensee or approved by the [F9 OGA] for the whole or part of the field.]

(2) For the purposes of subsection (1) above, no account shall be taken, in relation to an oil field, of a consent for development granted before 16th March 1993 or a programme of development served on a licensee or approved by the Secretary of State before that date if—

(a) in whole or in part that consent or programme related to another oil field for which a determination under Schedule 1 to the principal Act was made before the determination under that Schedule for the field in question; and

(b) on or after 16th March 1993, a consent for development is or was granted or a programme of development is or was served on a licensee or approved by the [F10 OGA] and that consent or programme relates, in whole or in part, to the field in question.

(3) Petroleum revenue tax shall not be charged in accordance with the Oil Taxation Acts in respect of—

(a) profits from oil won from a non-taxable field under the authority of such a licence as is referred to in section 1(1) of the principal Act; or

(b) any receipts accruing to a participator in a non-taxable field which, in the case of a taxable field, would be tariff receipts or disposal receipts attributable to the field for any period.

(4) Without prejudice to the generality of subsection (3) above—

(a) in section 1(2) of the principal Act (the charge to tax) after the words “oil field” there shall be inserted “ which is a taxable field ”;

(b) in section 3(1D) of the principal Act (apportionment of expenditure between oil field and non-oil field use) for the words “an oil field”, in both places where they occur, there shall be substituted “ a taxable field ”;

(c) in section 5B of the principal Act (allowance of research expenditure) in subsection (6) after the words “this Act” there shall be inserted “ or for purposes relating to non-taxable fields ”;

(d) no computation shall be made under the Oil Taxation Acts of the assessable profit or allowable loss accruing to a participator in any period from a non-taxable field; and

(e) no expenditure shall be regarded as allowable (or allowed) for a non-taxable field under the Oil Taxation Acts.

(5) In section 12(1) of the principal Act (interpretation) at the end of the definition of “oil field” there shall be added the words “ and “taxable field” and “non-taxable field” have the same meaning as in Part III of the Finance Act 1993 ”.

(6) Subject to paragraphs (b) and (c) of subsection (4) above, where, apart from this section, expenditure incurred on or after 16th March 1993 would fall to be apportioned (as being allowable expenditure) between two or more oil fields, at least one of which is a non-taxable field, the apportionment shall be made as if all the fields were taxable fields, but subsection (4)(e) above shall then apply to any amount of expenditure apportioned to a non-taxable field.

(7) In [F11 this section] above “development”, in relation to an oil field, means—

(a) the erection or carrying out of permanent works for the purpose of getting oil from the field or for the purpose of conveying oil won from the field to a place on land; or

(b) winning oil from the field otherwise than in the course of searching for oil or drilling wells;

and consent for development does not include consent which is limited to the purpose of testing the characteristics of an oil-bearing area and does not relate to the erection or carrying out of permanent works.

(8) In subsection (7) above “permanent works” means any structures or other works whatsoever which are intended by the licensee to be permanent and are neither designed to be moved from place to place without major dismantling nor intended by the licensee to be used only for searching for oil.

Textual Amendments

F1 S. 185(A1) inserted (21.7.2008) by Finance Act 2008 (c. 9), s. 107(2)

F2 Words in s. 185(1) substituted (21.7.2008) by Finance Act 2008 (c. 9), s. 107(3)(a)

F3 Words in s. 185(1) omitted (21.7.2008) by virtue of Finance Act 2008 (c. 9), s. 107(3)(b)

F4 S. 185(1ZA) inserted (21.7.2008) by Finance Act 2008 (c. 9), s. 107(4)

F5 Words in s. 185(1ZA)(b) substituted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 45 para. 3(2)(c)

F6 S. 185(1A)-(1C) inserted (19.7.2007) by Finance Act 2007 (c. 11), s. 102(3) (with s. 102(5))

F7 S. 185(1A)(za) inserted (21.7.2008) by Finance Act 2008 (c. 9), s. 107(5)

F8 Word in s. 185(1C)(a) substituted (1.10.2016) by The Petroleum (Transfer of Functions) Regulations 2016 (S.I. 2016/898), regs. 1(2), 12

F9 Word in s. 185(1C)(b) substituted (1.10.2016) by The Petroleum (Transfer of Functions) Regulations 2016 (S.I. 2016/898), regs. 1(2), 12

F10 Word in s. 185(2)(b) substituted (1.10.2016) by The Petroleum (Transfer of Functions) Regulations 2016 (S.I. 2016/898), regs. 1(2), 12

F11 Words in s. 185(7) substituted (19.7.2007) by Finance Act 2007 (c. 11), s. 102(4)

Modifications etc. (not altering text)

C1 S. 185 modified (temp.) (9.2.2018) by The Scotland Act 2016 (Onshore Petroleum) (Consequential Amendments) Regulations 2018 (S.I. 2018/79), regs. 1(2), 5 (with art. 2)