Part 8Oil activities
Chapter 4Calculation of profits
Tariff receipts etc
291AF1Meaning 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.