Part 8Oil activities
Chapter 5Ring fence expenditure supplement
Pre-commencement supplement
317Reduction in respect of disposal receipts under CAA 2001
1
This section applies in the case of the qualifying company if—
a
it incurs qualifying pre-commencement expenditure in respect of a ring fence trade in any pre-commencement period,
b
it would, on the relevant assumption, be entitled to an allowance under any provision of CAA 2001 in respect of that expenditure,
c
an event occurs in relation to any asset representing the expenditure in any pre-commencement period, and
d
the event would, on the relevant assumption, require a disposal value (the “deductible amount”) to be brought into account under any provision of CAA 2001 for any pre-commencement period.
2
The relevant assumption is that the company was carrying on the ring fence trade—
a
when the expenditure was incurred, and
b
when the event giving rise to the disposal value occurred.
3
For the purpose of allocating qualifying pre-commencement expenditure to the pool for each pre-commencement period—
a
find the total amount of the disposal values in the case of all such events (amount D), and
b
taking later periods before earlier periods, reduce (but not below nil) amount E for any pre-commencement period by setting against it so much of amount D as does not fall to be set against amount E for a later pre-commencement period.
F14
This section is subject to section 318A(5) (exclusion of deductible amounts in respect of pre-2013 expenditure when determining pre-commencement supplement for additional 4 periods).