Section 332DB — Corporation Tax Act 2010: Restriction where project in additionally-developed field qualified for field allowance

Restriction where project in additionally-developed field qualified for field allowance 332DB 1 This section applies to expenditure which—

a is incurred by a company in relation to a project by reference to which an oil field was immediately before 1 April 2015 an additionally-developed oil field for the purposes of Chapter 7, b would in the absence of this section be relievable under section 332C, and c is not excluded from this section by subsection (5) (material completion) or subsection (6) (company without share of project-related reserves). In the following provisions of this section, expenditure to which this section applies is referred to as “ relevant expenditure ”.

2 Relevant expenditure incurred by a company in relation to a project on any day (“ the relevant day ”) is not relievable expenditure for the purposes of section 332C except—

a if immediately before the relevant day the cumulative total of relevant expenditure attributable to the company's share of project-related reserves (see subsection (3)) exceeds the relevant project threshold (see subsection (4)), or b to the extent that, in a case not within paragraph (a), the amount of relevant expenditure incurred on the relevant day, when added to that cumulative total, exceeds the relevant project threshold.

3 The “cumulative total of relevant expenditure attributable to the company's share of project-related reserves” at any time is the total amount of relevant expenditure which is incurred by the company during the period beginning with 1 April 2015 and ending with that time, but this is subject to sections 332IA(5) and 332IB(6) (which relate to the disposal and acquisition of shares in project-related reserves).

4 The “relevant project threshold” is an amount given by the formula— 160 % × F × E where— F is the total field allowance for the oil field in relation to the project, as originally determined under section 356A for the purposes of Chapter 7; E is the company's share of project-related reserves at the end of the relevant day.

5 This section does not apply to expenditure which is incurred on or after the day determined by the OGA as that on which the project was materially completed.

6 This section does not apply to expenditure incurred by a company if—

a the company does not, at the time when the expenditure is incurred, hold a share of project-related reserves, and b the expenditure is incurred in making an asset available in a way which gives rise to tariff receipts (as defined by section 15(3) of the Oil Taxation Act 1983) or tax-exempt tariffing receipts (as defined by section 6A(2) of that Act).

7 In this section “ project-related reserves ”, in relation to a project and an oil field, means the additional reserves of oil that the oil field has as a result of the project.