163[F1Meaning of “general decommissioning expenditure”]U.K.
[F2(1)Expenditure is “general decommissioning expenditure” for the purposes of sections 164 and 165 if the conditions in subsections [F3(3) to (4)] are met.
(2)But that is subject to subsections (4ZA) to (4ZC).
(3)The expenditure must have been incurred on decommissioning plant or machinery—
(a)which has been brought into use [F4wholly or partly] for the purposes of a ring fence trade, and
(b)which—
(i)is, or forms part of, an offshore installation or a submarine pipeline, or
(ii)when last in use for the purposes of a ring fence trade, was, or formed part of, such an installation or pipeline.]
[F5(3A)The expenditure must have been incurred wholly or substantially in complying with—
(a)an approved abandonment programme,
(b)a condition to which the approval of an abandonment programme is subject, or
(c)a condition imposed by the Secretary of State, or an agreement made with the Secretary of State—
(i)before the approval of an abandonment programme, and
(ii)in relation to the decommissioning of the plant or machinery.]
(4)The plant or machinery must not be replaced.
(4ZA)An amount of general decommissioning expenditure determined in accordance with subsection (1) is to be reduced under subsection (4ZB) if it appears that the decommissioned plant and machinery—
[F6(a)was not brought into use wholly for qualifying purposes, or
(b)has, at any time since it was brought into use, not been used wholly for qualifying purposes].
(4ZB)The amount determined in accordance with subsection (1) is to be reduced to an amount which is just and reasonable having regard to the relevant circumstances.
(4ZC)The relevant circumstances include, in particular, the extent to which the decommissioned plant and machinery has not been used for [F7qualifying purposes].
[F8(4A) In this section “ decommissioning ”, in relation to any plant or machinery, means—
(a)demolishing the plant or machinery,
(b)preserving the plant or machinery pending its reuse or demolition,
(c)preparing the plant or machinery for reuse, or
(d)arranging for the reuse of the plant or machinery.
(4B)In determining whether expenditure is incurred on preserving plant or machinery pending its reuse or demolition, it is immaterial whether the plant or machinery is reused, is demolished or is partly reused and partly demolished.
(4C)In determining whether expenditure is incurred on preparing plant or machinery for reuse, or on arranging for the reuse of plant or machinery, it is immaterial whether the plant or machinery is in fact reused.]
[F9(4D)In this section a reference to use for qualifying purposes is a reference to—
(a)use for the purposes of any ring fence trade of any person, or
(b)other use in—
(i)the United Kingdom,
(ii)the territorial sea of the United Kingdom, or
(iii)an area designated under section 1(7) of the Continental Shelf Act 1964,
except use wholly or partly in connection with an oil field (within the meaning given by section 12(2) of the Oil Taxation Act 1975).]
(5)In this section—
(a)“oil field” has the same meaning as in Part I of OTA 1975, and
(b)[F10“abandonment programme”, “approval” and “approved” (in relation to an abandonment programme),] F11... “offshore installation” and “submarine pipeline” have the same meaning as in Part IV of the Petroleum Act 1998 (c. 17).
Textual Amendments
F1S. 163 heading substituted (with effect in accordance with s. 109(7) of the amending Act) by Finance Act 2008 (c. 9), s. 109(2)
F2S. 163(1)-(3) substituted (with effect in accordance with s. 109(7) of the amending Act) by Finance Act 2008 (c. 9), s. 109(3)
F3Words in s. 163(1) substituted (with effect in accordance with Sch. 38 para. 5 to the amending Act) by Finance Act 2009 (c. 10), Sch. 38 para. 2(2)
F4Words in s. 163(3)(a) inserted (with effect in accordance with Sch. 41 para. 7(1) to the amending Act) by Finance Act 2009 (c. 10), Sch. 41 para. 5(2)
F5S. 163(3A) inserted (with effect in accordance with Sch. 38 para. 5 to the amending Act) by Finance Act 2009 (c. 10), Sch. 38 para. 2(3)
F6S. 163(4ZA)(a)(b) substituted (with effect in accordance with Sch. 41 para. 7(1) to the amending Act) by Finance Act 2009 (c. 10), Sch. 41 para. 5(3)
F7Words in s. 163(4ZC) substituted (with effect in accordance with Sch. 41 para. 7(1) to the amending Act) by Finance Act 2009 (c. 10), Sch. 41 para. 5(4)
F8S. 163(4A)-(4C) inserted (with effect as mentioned in Sch. 20 para. 9(1)(5)(8) of the amending Act) by Finance Act 2001 (c. 9), s. 68, Sch. 20 Pt. 2 para. 6(5)
F9S. 163(4D) inserted (with effect in accordance with Sch. 41 para. 7(1) to the amending Act) by Finance Act 2009 (c. 10), Sch. 41 para. 5(5)
F10Words in s. 163(5)(b) inserted (with effect in accordance with Sch. 38 para. 5 to the amending Act) by Finance Act 2009 (c. 10), Sch. 38 para. 2(4)
F11Words in s. 163(5)(b) omitted (with effect in accordance with s. 109(7) of the amending Act) by virtue of Finance Act 2008 (c. 9), s. 109(5)