Finance Act 1999

98 Qualifying assets

(1) Subsection (2) below applies where—

(a) an asset which is not a mobile asset is a qualifying asset for the purposes of the [1983 c. 56.] Oil Taxation Act 1983 in relation to a person (“the taxpayer”) who is a participator in an oil field (“the field”);

(b) tariff receipts or disposal receipts of the taxpayer which are referable to the asset are attributable to the field for a chargeable period (“the earlier period”);

(c) receipts of the taxpayer which are referable to the asset for a subsequent chargeable period (“the later period”) would not, apart from this section, be tariff receipts or disposal receipts attributable to the field for that period as a result of—

(i) the taxpayer’s ceasing to be a participator in the field; or

(ii) his becoming a participator in another oil field; and

(d) not more than two chargeable periods intervene between the earlier period and the later period.

(2) The Oil Taxation Acts shall have effect, in relation to the later period and any subsequent chargeable period, as if—

(a) receipts of the taxpayer which are referable to the asset for the period concerned were tariff receipts or disposal receipts attributable to the field for that period; and

(b) in a case falling within subsection (1)(c)(i) above, the taxpayer continued to be a participator in the field.

(3) Subsection (4) below applies where—

(a) an asset which is not a mobile asset is a qualifying asset for the purposes of the Oil Taxation Act 1983 in relation to a person (“the taxpayer”) who is a participator in an oil field (“the field”);

(b) tariff receipts or disposal receipts of the taxpayer which are referable to the asset are attributable to the field for a chargeable period (“the earlier period”);

(c) in a subsequent chargeable period (“the later period”) the taxpayer disposes of—

(i) the asset; or

(ii) an interest in the asset,

to another person (“the transferee”) in circumstances such that section 7 of the Oil Taxation Act 1983 does not apply to the disposal; and

(d) not more than two chargeable periods intervene between the earlier period and the later period.

(4) The Oil Taxation Acts shall have effect, in relation to the later period and any subsequent chargeable period, as if—

(a) receipts of the transferee which are referable to the asset for the period concerned were tariff receipts or disposal receipts attributable to the field for that period; and

(b) the transferee were a participator in the field.

(5) Subject to subsection (6) below, any reference in this section to receipts of any person which are referable to the asset for a period is a reference to any sums which—

(a) are received or receivable by that person in that period in respect of the use of the asset, or the provision of services or other business facilities of whatever kind in connection with its use; or

(b) are received or receivable by that person in respect of the disposal in that period of the asset, or an interest in the asset.

(6) In a case falling within subsection (3)(c)(ii) above—

(a) any sums which are received or receivable by the transferee otherwise than by virtue of his acquisition of the interest shall not be regarded for the purposes of subsection (4) above as receipts of his which are referable to the asset for any period; and

(b) for the purposes of paragraph (a) above, such apportionments shall be made as may be just and reasonable.

(7) This section shall be construed as one with Part I of the [1975 c. 22.] Oil Taxation Act 1975; and in this section “the Oil Taxation Acts” means—

(a) the enactments relating to petroleum revenue tax (including this section);

(b) Chapter V of Part XII of the Taxes Act 1988 (petroleum extraction activities); and

(c) sections 62 to 65 of the [1991 c. 31.] Finance Act 1991 (oil industry).

(8) Nothing in this section shall be taken to affect the meaning of “participator” in paragraph 4 of Schedule 2 to the principal Act.

(9) Subject to subsection (11) below, subsection (1) above applies where—

(a) the disposal by virtue of which the taxpayer ceased to be a participator in the field; or

(b) the acquisition by virtue of which he became a participator in the other oil field,

was made on or after 1st July 1999.

(10) Subject to subsection (11) below, subsection (3) above applies where the asset, or the interest in the asset, was disposed of on or after that date.

(11) Neither subsection (1) nor subsection (3) above applies where the disposal or acquisition concerned was made pursuant to an agreement which was made before 1st July 1999 and either—

(a) the agreement was not conditional; or

(b) the agreement was conditional and the condition was satisfied before that date.