Part 1The Civil Nuclear Industry

Chapter 1Nuclear decommissioning

Financial provisions

I129Disregard for tax purposes of cancellation etc. of provisions

1

This section applies where—

a

a relevant provision is recognised in the accounts of a F3BNFL company in accordance with generally accepted accounting practice;

F4b

that provision—

i

relates to decommissioning or cleaning-up which the NDA acquires or has acquired responsibility for securing by virtue of a direction under section 3, but

ii

is not provision recognised in order to reflect the terms or effect of a management contract between the company and the NDA ;

and

c

the responsibility referred to in paragraph (b)(i)—

i

includes the financial responsibility under section 21, or

ii

would do so but for the fact that the amount of the financial responsibility is for the time being subject to a limit imposed by a capping agreement.

2

In computing the profits, gains or losses of the company for the purposes of corporation tax, no amount shall be brought into account in respect of a credit or debit to which subsection (3) applies.

F13

This subsection applies to a credit or debit if it arises from—

a

the recognition in the accounts of the company for a relevant period beginning on or after 1st April 2005 of—

i

the relevant provision, or

ii

an asset that, in accordance with generally accepted accounting practice, is recognised in connection with the relevant provision in order to reflect the acquisition of financial responsibility referred to in subsection (1) (a “matching asset”);

b

an adjustment made in the accounts of the company for such a period of—

i

the relevant provision, or

ii

a matching asset;

or

c

the removal from the accounts of the company for such a period of—

i

the relevant provision,

ii

a matching asset, or

iii

an asset or liability recognised in order to reflect the terms or effect of a contract falling within subsection (3A).

3A

A contract falls within this subsection if—

a

it is a contract made before 1st April 2005 and having effect between two or more BNFL companies under which a party to the contract assumed responsibility for securing decommissioning or cleaning-up; and

b

the rights and obligations under the contract are extinguished by reason of a transfer made under a nuclear transfer scheme.

5

In this section—

  • F5“BNFL company” means—

    1. (a)

      BNFL,

    2. (b)

      a company that immediately before 1st April 2005 was a wholly-owned subsidiary of BNFL, or

    3. (c)

      a wholly-owned subsidiary of a company falling within paragraph (b);

  • F6“capping agreement” means an agreement under subsection (9) of section 21, entered into on 1st April 2005, the sole or main effect of which is to impose a limit on the NDA's financial responsibility under that section;

  • “management contract” has the same meaning as in section 27;

  • F7“relevant period”, in relation to a company, means an accounting period during the whole of which the company is publicly owned;

  • “relevant provision” means F8any amount retained as reasonably necessary for the purposes of providing for any liability or loss which is either likely to be incurred, or certain to be incurred but uncertain as to amount or as to the date on which it will arise.

F25A

Where a company ceases to be publicly owned otherwise than at the end of an accounting period—

a

the accounting period during which it ceases to be publicly owned is treated for the purposes of corporation tax as ending when it so ceases; and

b

its profits and losses are to be computed accordingly for those purposes.

6

This section is to be construed as one with the Corporation Tax Acts.