Part 8Oil activities

F1CHAPTER 5AExtended ring fence expenditure supplement for onshore activities

Introduction

329AOverview of Chapter

(1)

This Chapter entitles a company carrying on a ring fence trade, on making a claim in respect of an accounting period, to an additional supplement in respect of—

(a)

qualifying pre-commencement onshore expenditure incurred before the date the trade is set up and commenced,

(b)

losses incurred in the trade which relate to onshore oil-related activities,

(c)

some or all of the supplement allowed in respect of earlier periods under Chapter 5, and

(d)

the additional supplement allowed in respect of earlier periods under this Chapter.

(2)

Sections 329B to 329H make provision about the application and interpretation of this Chapter.

(3)

Sections 329I to 329M make provision about additional supplement in relation to expenditure incurred by the company—

(a)

with a view to carrying on a ring fence trade, but

(b)

in an accounting period before the company sets up and commences that trade.

(4)

Sections 329N to 329T make provision about additional supplement in relation to losses incurred in carrying on the ring fence trade.

(5)

There is a limit (of 4) on the number of accounting periods in respect of which a company may claim additional supplement.

(6)

In determining the amount of additional supplement allowable, reductions fall to be made in respect of—

(a)

disposal receipts in respect of any asset representing qualifying pre-commencement onshore expenditure,

(b)

onshore ring fence losses that could be deducted under section 37 (relief for trade losses against total profits) or section 42 (ring fence trades: further extension of period for relief) from ring fence profits of earlier periods,

(c)

onshore ring fence losses incurred in earlier periods that fall to be used under section 45 (carry forward of trade loss against subsequent trade profits) to reduce profits of succeeding periods, and

(d)

unrelieved group ring fence profits.