Section 332C — Corporation Tax Act 2010: Generation of investment allowance

Generation of investment allowance 332C 1 Subsection (2) applies where a company—

a is a participator in a qualifying oil field, and b incurs any relievable investment expenditure on or after 1 April 2015 in relation to the oil field.

2 The company is to hold an amount of allowance equal to 62.5% of the amount of the expenditure. Allowance held under this Chapter is called “investment allowance”.

3 For the purposes of this section investment expenditure incurred by a company is “relievable” only if, and so far as, it is incurred for the purposes of oil-related activities (see section 274).

4 Subsections (1) to (3) are subject to—

a section 332D (which prevents expenditure on the acquisition of an asset from being relievable in certain circumstances),

b section 332DA (which restricts relievable expenditure in relation to an oil field that previously qualified for a field allowance under Chapter 7 as a new oil field),

c section 332DB (which restricts relievable expenditure in relation to a project by reference to which an oil field previously qualified for a field allowance under Chapter 7 as an additionally-developed oil field),

and d section 332DC (which prevents certain expenditure from being relievable if it relates to an oil field in respect of which onshore allowance may be obtained under Chapter 8).

5 Investment allowance is said in this Chapter to be “generated” at the time when the investment expenditure is incurred (see section 332K) and is referred to as being generated—

a “by” the company concerned;

b “in” the qualifying oil field concerned.

6 Where—

a investment expenditure is incurred only partly for the purposes of oil-related activities, or b the oil-related activities for the purposes of which investment expenditure is incurred are carried on only partly in relation to a particular qualifying oil field, the expenditure is to be attributed to the activities or field concerned on a just and reasonable basis.