Source: http://www.legislation.gov.uk/ukpga/2019/1/schedule/15/enacted
Timestamp: 2019-06-27 05:23:29
Document Index: 380959341

Matched Legal Cases: ['ART 2', 'ART 5', 'ART 6', 'ART 7', 'ART 12', 'art 8', 'art 5', 'art 8', 'art 8', 'art 1']

PART 2The total TTH amount
5To determine the “uplifted decommissioning costs estimate” in relation to the TTH asset—
(a)determine the transferred proportion of the net cost amount (see paragraphs 6 and 7),
(b)allocate the relevant proportion of the amount determined under paragraph (a) to the TTH asset (see paragraph 8),
(c)adjust the allocated amount in accordance with paragraph 9, and
(d)double the adjusted amount.
6(1)The “net cost amount” is the appropriate DSA estimate of the decommissioning costs for the TTH oil field.
(2)A “DSA estimate” is an estimate approved for the purposes of a qualifying decommissioning security agreement.
(3)If there is only one qualifying decommissioning security agreement relating to the TTH oil field, the “appropriate DSA estimate” is the most recent DSA estimate approved for the purposes of that agreement within the relevant period.
(4)If there is more than one qualifying decommissioning security agreement relating to the TTH oil field, the “appropriate DSA estimate” is the lowest of the DSA estimates approved for the purposes of any of those agreements within the relevant period.
(5)For the purposes of sub-paragraphs (3) and (4), the “relevant period” is the period of 12 months ending with—
(a)the date on which the TTH election is made, or
(b)in a case where the hive down condition (see paragraph 56(5)) is met, the date on which the seller and the purchaser cease to be associated with one another.
9(1)To adjust the allocated amount for the purposes of paragraph 5(c)—
(a)disregard the adjustments listed in sub-paragraph (2) made, for the purposes of calculating the net cost amount, in accordance with the terms of the decommissioning security agreement, and
(b)if, in making that calculation in accordance with those terms, the relevant proportion of the estimate of the decommissioning costs is increased by an amount to take account of inflation, disregard the amount (if any) by which the increase exceeds the standard inflation adjustment amount.
(2)The adjustments to be disregarded are—
(a)any discount applied by reference to the period of time expected to elapse before the decommissioning costs are payable in relation to the TTH oil field, and
(b)any adjustment made for the purposes of taking account of the risk that the decommissioning costs for the TTH oil field will exceed the estimate of those costs.
(3)The “standard inflation adjustment amount” means the amount (if any) by which the relevant proportion of the estimate of the decommissioning costs for the TTH oil field would be increased if an adjustment for the purposes of taking account of inflation were made on the basis specified by Her Majesty’s Revenue and Customs for the purposes of this paragraph.
Consecutive accounting periods
11(1)The total TTH amount may not include an amount representing the eligible ring fence profits for a particular accounting period (other than the reference accounting period) unless it also includes an amount representing the eligible ring fence profits for the next following qualifying accounting period.
(2)An accounting period is “qualifying” for the purposes of this Schedule if the seller has eligible ring fence profits for that period.
The transferred profits amount
12(1)The transferred profits amount for an accounting period, other than the earliest period, must be an amount equal to the amount of the seller’s eligible ring fence profits for the period.
(2)The transferred profits amount for the earliest period must be an amount equal to the amount of the seller’s eligible ring fence profits for that period, so far as that amount does not exceed the TTH balance for the earliest period.
(3)The “TTH balance” for the earliest period is an amount equal to—
(b)the transferred profits amounts for each later accounting period.
(4)In this paragraph, “earliest period” means the earliest accounting period for which there is a transferred profits amount.
14In determining, for the purposes of this Schedule, the amount of the seller’s eligible ring fence profits for an accounting period that falls partly before 17 April 2002, the amount of the seller’s eligible ring fence profits for that period is to be reduced by the proportion which the part of the accounting period falling before that date bears to the whole of the accounting period.
PART 5TTH activation
Decommissioning expenditure amount
31The “decommissioning expenditure amount” attributable to the TTH oil field for an accounting period, is the total of each of the following amounts attributable to the field for the post-acquisition accounting period—
(a)the special allowance amount,
(b)the post-cessation expenditure amount, and
(c)the restoration expenditure amount.
32(1)The “special allowance amount” for an accounting period is the amount of a special allowance made under section 164 of CAA 2001 (general decommissioning expenditure incurred before cessation of ring fence trade) for that period.
(2)A special allowance amount is attributable to the TTH oil field so far as the expenditure in respect of which the allowance is made is expenditure incurred on decommissioning plant or machinery brought into use for the purposes of oil-related activities carried on wholly or partly in direct connection with the field.
33(1)The “post-cessation expenditure amount” for an accounting period is the amount that, under section 165(3)(a) of CAA 2001 (general decommissioning expenditure after ceasing ring fence trade), is allocated to the appropriate pool for that period.
(2)A post-cessation expenditure amount is attributable to the TTH oil field so far as the general decommissioning expenditure in respect of which the amount is allocated is expenditure incurred on decommissioning plant or machinery brought into use for the purposes of oil-related activities carried on wholly or partly in direct connection with the field.
34(1)The “restoration expenditure amount” for an accounting period is the amount that is treated as qualifying expenditure under section 416ZA of CAA 2001 (ring fence trades: expenditure on site restoration) for that period.
(2)A restoration expenditure amount is attributable to the TTH oil field if the qualifying expenditure is incurred in relation to the field.
35For the purposes of paragraphs 32(2), 33(2) and 34(2), expenditure for an accounting period is to be apportioned between the TTH oil field and other oil fields (or parts of oil fields) on a just and reasonable basis.
PART 6Allocation of activated TTH amount
36This Part of this Schedule applies if a TTH activation event occurs in relation to the TTH asset.
(a)“first activation period” means the first post-acquisition accounting period of the purchaser in which a TTH activation event occurs, and
(b)“post-activation period” means a subsequent accounting period of the purchaser.
38The “total activated TTH amount” held by the purchaser for a loss period which is the first activation period is the lower of—
(a)the amount by which, at the end of that period, the total decommissioning expenditure amount exceeds the total net profits amount (see paragraph 30), and
(b)the total TTH amount.
39The “total activated TTH amount” held by the purchaser for a loss period which is a post-activation period is the lower of—
(a)the adjusted activated TTH amount (see paragraphs 40 to 42), and
(b)the closing balance of the total TTH amount for the immediately preceding accounting period (see paragraph 49).
40(1)This paragraph applies if, in relation to a post-activation period—
(a)the relevant proportion of the decommissioning expenditure amount attributable to the TTH oil field for that period, exceeds
(b)the tracked profit or loss amount attributable to the TTH asset for that period.
(2)The “additional activated TTH amount” for the post-activation period is an amount equal to the excess.
(3)For the purposes of paragraph 39, the adjusted activated TTH amount is the total of—
(a)the closing balance of activated TTH for the immediately preceding accounting period, and
(b)the additional activated TTH amount for the post-activation period.
(4)In this paragraph and in paragraph 41, “relevant proportion” has the same meaning as in paragraph 30(5).
42If neither paragraph 40 nor paragraph 41 applies in relation to a post-activation period, the “adjusted activated TTH amount” for the purposes of paragraph 39 is—
(a)an amount equal to the closing balance of activated TTH for the immediately preceding accounting period, if it is greater than nil, or
(b)nil, if the closing balance of activated TTH for the immediately preceding accounting period is nil or a negative amount.
44The total activated TTH amount for a loss period is to be allocated, for the purposes of the application of paragraph 25 in relation to that loss period, to pre-acquisition accounting periods of the purchaser as follows—
Take the most recent pre-acquisition accounting period for which there is an unused transferred profits amount which is greater than nil.
Allocate to that pre-acquisition accounting period an amount equal to the lower of—
the unused transferred profits amount, and
the total activated TTH amount held by the purchaser for the loss period.
Allocate to the next most recent pre-acquisition accounting period an amount equal to the lower of—
the transferred profits amount for that period, and
the available activated TTH amount for the loss period.
Repeat Step 3 (taking later pre-acquisition accounting periods before earlier ones) until the amount given by paragraph (a) or (b) is nil.
“Unused transferred profits amount”
46(1)This paragraph applies for the purposes of Steps 1 and 2 of paragraph 44.
(2)If the loss period is the first activation period, the reference to the “unused transferred profits amount” for a pre-acquisition accounting period is a reference to the transferred profits amount for that period.
(3)If the loss period is a post-activation period, the reference to the “unused transferred profits amount” for a pre-acquisition accounting period is a reference to the amount equal to—
(a)the transferred profits amount for the pre-acquisition accounting period, less
(b)the total of the amounts applied for the pre-acquisition accounting period in accordance with paragraph 25, for the purposes of the application of that paragraph in relation to the first activation period or an earlier post-activation period.
PART 7Supplementary charge: recalculation of adjusted ring fence profits
“Reduced ARFP amount”
51(1)To determine the “reduced ARFP amount” for a pre-acquisition accounting period—
(a)take the activated ARFP amount for the period, and
(b)reduce that amount by the amount applied, in relation to the loss period mentioned in paragraph 26(1), in accordance with paragraph 25(2)(b) or (3)(b) for the pre-acquisition accounting period.
(2)This paragraph is subject to paragraph 52.
52(1)This paragraph (instead of paragraph 51) applies if the percentage specified in section 330(1) of CTA 2010 for the pre-acquisition accounting period mentioned in paragraph 26(1) is greater than 20%.
(2)To determine the “reduced ARFP amount” for the pre-acquisition accounting period—
(a)calculate the total of—
(i)the activated ARFP amount for the period, and
(ii)the ARFP uplift amount for the period (see paragraph 54),
(b)reduce the amount given by paragraph (a) by the amount applied, in relation to the loss period mentioned in paragraph 26(1), in accordance with paragraph 25(2)(b) or (3)(b) for the pre-acquisition accounting period.
“ARFP uplift amount”
54The “ARFP uplift amount” for a pre-acquisition accounting period is the amount equal to—
SC is the percentage specified in section 330(1) of CTA 2010 for the pre-acquisition accounting period, and
A is the amount applied, in relation to the loss period, in accordance with paragraph 25(2)(b) or (3)(b) for the pre-acquisition accounting period.
“Adjusted finance cost amount”
55The “adjusted finance cost amount” for a loss period is the amount equal to—
L is the amount of the decommissioning loss in the loss period (see paragraph 23(d)(i) and (ii)), and
FC is the lower of—
the amount of the financing costs brought into account under section 330(3) of CTA 2010 for the purposes of determining the purchaser’s adjusted ring fence profits for the loss period, and
the amount of the purchaser’s loss in the ring fence trade for the loss period (see paragraph 23(d)(i)).
PART 12Chargeable gains
Transferred tax history is not to be regarded as an asset
76Where the seller and the purchaser jointly make a TTH election in respect of the TTH asset, the transfer of tax history is not to be treated as—
(a)the disposal or acquisition of an asset for the purposes of TCGA 1992, or
(b)the disposal or acquisition of an intangible fixed asset for the purposes of Part 8 of CTA 2009.
Consideration for transferred tax history to be treated as consideration for the licence interest
77The amount or value of any consideration for the transfer of tax history is to be treated as part of the consideration for the licence interest for the purposes of—
(a)computing the chargeable gain or allowable loss accruing on the disposal (or on any subsequent disposal) of the licence interest (see section 8 of TCGA 1992), and
(b)computing the disposal value of the licence interest, on its disposal, for the purposes of Part 5 of CAA 2001 (mineral extraction allowances).
Licence swaps: references to disposal include references to transfer of tax history
79For the purposes of the application of sections 195A to 196 of TCGA 1992 (oil licence swaps) in relation to the disposal of the licence interest by the seller to the purchaser, references in those sections to the disposal are treated as including references to the transfer of tax history.
97The following definitions apply for the purposes of this Schedule.
98Expressions used in this Schedule that are defined for the purposes of Part 8 of CTA 2010 (oil activities) have the same meaning in this Schedule as in Part 8 of that Act.
“UK oil licence”
99“UK oil licence” means a licence granted under—
(a)Part 1 of the Petroleum Act 1998, or
(b)the Petroleum (Production) Act (Northern Ireland) 1964 (c.28 (N.I.)).
“Licence transfer date”
101“Licence transfer date”, in relation to a TTH election, means the date of completion of the sale of the TTH asset in respect of which the election is made.
The seller’s “reference accounting period”
102(1)The seller’s “reference accounting period” is the accounting period which is, at the licence transfer date, the seller’s most recent qualifying accounting period in respect of which the amendment period has ended.
(2)The “amendment period”, in relation to an accounting period, is 12 months beginning with the filing date for the company tax return for the accounting period.
(3)In this paragraph “filing date” has the same meaning as in Schedule 18 to FA 1998 (see paragraph 14 of that Schedule).
The purchaser’s “reference accounting period”
103(1)The “purchaser’s reference accounting period” means—
(a)an accounting period of the purchaser that begins with the same date as, and ends with the same date as, the seller’s reference accounting period, or
(b)if no accounting period of the purchaser falls within paragraph (a), the earliest accounting period of the purchaser that overlaps with the seller’s reference accounting period.
(2)See paragraph 106 for provision about accounting periods before the purchaser comes within the charge to corporation tax.
The seller’s “pre-transfer accounting periods”
104Each of the following is a “pre-transfer accounting period” of the seller—
(a)the reference accounting period (see paragraph 102), and
“Transferred profits amount” and “activated transferred profits amount”
107(1)References to the “transferred profits amount” for an accounting period of the seller are references to the amount representing the seller’s ring fence profits for that period which forms part of the total TTH amount.
(2)See paragraph 45 for provision about references to the “transferred profits amount” for a pre-acquisition accounting period of the purchaser.
(3)See paragraph 25(4) for provision about the meaning of “activated transferred profits amount”.
“Trade loss relief provisions”
108“Trade loss relief provisions” means 37 to 44 of CTA 2010 (trade losses: carry back relief etc).