Section 285 — Corporation Tax Act 2010: Valuation where appropriation to refining etc

Valuation where appropriation to refining etc 285 1 This section applies if conditions A, B and C are met.

2 Condition A is that a company appropriates oil acquired by it—

a in the course of oil extraction activities carried on by it, or b as a result of oil rights held by it.

3 Condition B is that the oil is appropriated to refining or to any use except the production purposes of an oil field (as defined in section 12(1) of OTA 1975).

4 Condition C is that section 284 does not apply in relation to the appropriation.

5 For the purposes of the charge to corporation tax on income—

a the company is to be treated as having, at the time of the appropriation, sold and purchased the oil as mentioned in section 284(4)(a) and (b),

and b that sale and purchase is to be treated as having been at a price equal to the market value of the oil.

6 Paragraphs 2 and 3A of Schedule 3 to OTA 1975 (definition of market value of oil including light gases) apply for the purposes of this section as they apply for the purposes of Part 1 of that Act, but with the following modifications.

7 Those modifications are that—

a any reference in paragraph 2 to the notional delivery day for the actual oil is to be read as a reference to the day on which the oil is appropriated as mentioned in this section, b any reference in paragraphs 2 and 2A to oil being relevantly appropriated is to be read as a reference to its being appropriated as mentioned in this section, and c paragraph 2(4) is to be treated as omitted.