Part 8Oil activities
Chapter 7Reduction of supplementary charge for certain new oil fields
No change in equity share: activation of allowance
340Introduction to section 341
(1)
Section 341 applies to a company in respect of a new oil field and an accounting period if the following conditions are met.
(2)
Condition A is that the company is a licensee in the field for the whole of the accounting period.
(3)
Condition B is that the company’s share of the equity in the field is the same during the whole of the accounting period.
(4)
Condition C is that the company holds an unactivated amount of field allowance for the field at the beginning of the accounting period.
(5)
Condition D is that the company has relevant income from the new oil field in the accounting period.
341Activation of field allowance
(1)
An amount of the company’s field allowance for the new oil field is to be activated in respect of the accounting period.
(2)
The amount of the field allowance to be activated is the smallest of the following amounts—
(a)
the relevant activation limit,
(b)
the company’s relevant income from the field in the accounting period, and
(c)
the unactivated amount of the field allowance which the company holds at the beginning of the accounting period.
(3)
The relevant activation limit is—
where—
T is the amount of the total field allowance for the field (see section 356),
E is the company’s share of the equity in the field during the accounting period, and
N is the number of days in the accounting period.