Section 291A — Corporation Tax Act 2010: Meaning of “tariff receipt”

Meaning of “tariff receipt” 291A 1 A “tariff receipt” of a participator in an oil field is the amount or value of any consideration received or receivable by the person in respect of—

a the use of a ring fence asset, or b the provision of services or other business facilities (of whatever kind) in connection with the use, otherwise than by the participator, of a ring fence asset. 2 “ Ring fence asset ” means a qualifying asset which is, or has been, used wholly or partly for the purposes of a ring fence trade. 3 “ Qualifying asset ” means an asset other than—

a land or an interest in land, or b a building or structure which—

i is situated on land, and ii does not fall within any of sub-paragraphs (i) to (iv) of paragraph (c) of section 3(4) of OTA 1975 (allowable expenditure: exclusions).

4 But an amount does not constitute a tariff receipt if the amount—

a is, in relation to the person giving it, expenditure in respect of interest or any other pecuniary obligation incurred in obtaining a loan or any other form of credit, b is referable to the use of a qualifying asset for, or the provision of services or facilities in connection with, deballasting, or c is referable to other use of an asset, except use wholly or partly for an oil purpose.

5 Any consideration which includes an amount within subsection (4)(a) to (c) is to be apportioned in a just and reasonable manner.

6 In subsection (4)(c), the reference to use of an asset for an oil purpose is a reference to—

a use in connection with an oil field (including use giving rise to receipts which, for the purposes of this Part, are tariff receipts),

and b use for any other purpose (apart from a purpose falling within section 3(1)(b) of OTA 1975 (allowable expenditure: payment in connection with a relevant licence)) of a separate trade consisting of oil-related activities.