Section 284 — Corporation Tax Act 2010: Valuation where relevant appropriation but no disposal

Valuation where relevant appropriation but no disposal 284 1 This section applies if conditions A and B are met.

2 Condition A is that a company makes a relevant appropriation of oil without disposing of it.

3 Condition B is that the company does so in circumstances such that the market value of the oil—

a falls to be taken into account under section 2 of OTA 1975 in calculating for petroleum revenue tax purposes the assessable profit or allowable loss accruing to it in a chargeable period from an oil field, or b would so fall but for section 10 of that Act.

4 For the purposes of the charge to corporation tax on income, the company is to be treated as having, at the time of the appropriation—

a sold the oil in the course of the separate trade consisting of activities falling within the definition of “oil-related activities” in section 274, and b purchased it in the course of the separate trade consisting of activities not so falling.

5 For those purposes, that sale and purchase is to be treated as having been at a price equal to the market value of the oil—

a as so taken into account under section 2 of OTA 1975, or b as would have been so taken into account under that section but for section 10 of that Act.

6 In this section “ relevant appropriation ” has the meaning given by section 12(1) of OTA 1975.