Commentary

D7.923 Field allowances

Corporate tax
Corporate tax | Commentary

D7.923 Field allowances

Corporate tax | Commentary

D7.923 Field allowances

The provisions in this article were repealed for accounting periods ending on or after 1 April 2015 for additionally developed oil fields authorised before 1 April 2015 and for new oil fields authorised before 1 January 2016. The repeal also has effect for additionally developed oil fields authorised on or after 1 April 2015 and new oil fields authorised on or after 1 January 2016. In certain circumstances unactivated field allowance can become unactivated investment allowance, as can activated but unused field allowance. For details see D7.924A.

As an incentive to encourage investment in certain new projects a relief known as a 'field allowance', is given against profits subject to the supplementary charge1.

Where a company holds both field allowances and onshore allowances (D7.924) it may choose the order in which the allowances are to be used2.

Eligible expenditure

The allowance is given in respect of new oil fields and 'additionally developed' oil fields (brown field sites)3. Together these are referred to as 'eligible oil fields' in the legislation. It is also made clear that a company may hold more than one field allowance for a field at the same time4.

New oil fields

New oil fields are defined as 'qualifying oil fields' which are in turn defined as oil fields (other than, from 5 December 20135, onshore oil fields; relief for onshore fields in now provided as detailed at D7.924) that are either6:

  1.  

    (a)     a small oil field, authorised on or after 22 April 2009. A small oil field is

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