Part 8 Oil activities

Chapter 4 Calculation of profits

Tariff receipts etc

291A Meaning of “tariff receipt”
(1) A “tariff receipt” of a participator in an oil field is the amount or value of any consideration received or receivable by the person in respect of—
(a) the use of a ring fence asset, or
(b) the provision of services or other business facilities (of whatever kind) in connection with the use, otherwise than by the participator, of a ring fence asset.
(2) “Ring fence asset” means a qualifying asset which is, or has been, used wholly or partly for the purposes of a ring fence trade.
(3) “Qualifying asset” means an asset other than—
(a) land or an interest in land, or
(b) a building or structure which—
(i) is situated on land, and
(ii) does not fall within any of sub-paragraphs (i) to (iv) of paragraph (c) of section 3(4) of OTA 1975 (allowable expenditure: exclusions).
(4) But an amount does not constitute a tariff receipt if the amount—
(a) is, in relation to the person giving it, expenditure in respect of interest or any other pecuniary obligation incurred in obtaining a loan or any other form of credit,
(b) is referable to the use of a qualifying asset for, or the provision of services or facilities in connection with, deballasting, or
(c) is referable to other use of an asset, except use wholly or partly for an oil purpose.
(5) Any consideration which includes an amount within subsection (4)(a) to (c) is to be apportioned in a just and reasonable manner.
(6) In subsection (4)(c), the reference to use of an asset for an oil purpose is a reference to—
(a) use in connection with an oil field (including use giving rise to receipts which, for the purposes of this Part, are tariff receipts), and
(b) use for any other purpose (apart from a purpose falling within section 3(1)(b) of OTA 1975 (allowable expenditure: payment in connection with a relevant licence)) of a separate trade consisting of oil-related activities.
Ss. 291A, 291B inserted (with effect in accordance with s. 22(5) of the amending Act) by Finance Act 2018 (c. 3), s. 22(3)