Part 8 Oil activities

CHAPTER 6A Supplementary charge: investment allowance

Restrictions on relievable expenditure

332DA Restriction where field qualified for field allowance as new field
(1) This section applies to expenditure which—
(a) is incurred by a company in relation to an oil field that was for the purposes of Chapter 7 a new oil field with an authorisation day before 1 January 2016,
(b) would in the absence of this section be relievable under section 332C, and
(c) is not excluded from this section by—
(i) subsection (5) (material completion),
(ii) subsection (7) (company without share of equity), or
(iii) subsection (8) (additionally-developed oil fields).
In the following provisions of this section, expenditure to which this section applies is referred to as “relevant expenditure”.
(2) Relevant expenditure incurred by a company on any day (“the relevant day”) is not relievable expenditure for the purposes of section 332C except—
(a) if immediately before the relevant day the cumulative total of relevant expenditure attributable to the company's share of the equity in the oil field (see subsection (3)) exceeds the relevant field threshold (see subsection (4)), or
(b) to the extent that, in a case not within paragraph (a), the amount of relevant expenditure incurred on the relevant day, when added to that cumulative total, exceeds the relevant field threshold.
(3) The “cumulative total of relevant expenditure attributable to the company's share of the equity in the oil field” at any time is the total amount of relevant expenditure which is incurred by the company during the period beginning with the start date and ending with that time, but this is subject to sections 332IA(3) and 332IB(4) (which relate to the disposal and acquisition of equity in an oil field).
In this subsection “the start date” means 1 April 2015 or, if later, the authorisation day (within the meaning of Chapter 7) for the field.
(4) The “relevant field threshold” is an amount given by the formula—
160 % × F × E
where—
F is the total field allowance for the oil field, as originally determined under section 356 for the purposes of Chapter 7;
E is the company's share of the equity in the oil field at the end of the relevant day.
(5) This section does not apply to expenditure which is incurred on or after the day determined by the OGA as that on which the relevant project was materially completed.
Word in s. 332DA(5) substituted (1.10.2016) by The Petroleum (Transfer of Functions) Regulations 2016 (S.I. 2016/898), regs. 1(2), 15(3)
(6) “The relevant project” means—
(a) in a case that fell within section 351(1)(a), the development described in the field development plan for the field, and
(b) in a case that fell within section 351(1)(b) or (c), the programme of development for the field.
(7) This section does not apply to expenditure incurred by a company if—
(a) at the time when the expenditure is incurred, the company is not a licensee in the oil field, and
(b) the expenditure is incurred in making an asset available in a way which gives rise to tariff receipts (as defined by section 15(3) of the Oil Taxation Act 1983) or tax-exempt tariffing receipts (as defined by section 6A(2) of that Act).
(8) This section does not apply to expenditure to which section 332DB applies.
Pt. 8 Ch. 6A restricted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 13 para. 6(2)
Pt. 8 Ch. 6A inserted (with effect in accordance with Sch. 12 para. 5 7 8 of the amending Act) by Finance Act 2015 (c. 11), Sch. 12 para. 2