Section 198K — Finance Act 2014: Provisional application of section 198J

Provisional application of section 198J 198K 1 This section applies where a company for a consideration disposes of, or of an interest in, any assets at a time when it is an E&A company and declares, in the company's return for the chargeable period in which the disposal takes place—

a that the whole or any specified part of the consideration will be applied, within the permitted reinvestment period—

i on E&A expenditure at a time when the company is an E&A company, or ii on expenditure on oil assets which are taken into use, and used only, for the purposes of the company's ring fence trade, and b that the company intends to make a claim under section 198J(2) or (4) in relation to the disposal.

2 Until the declaration ceases to have effect, section 198J applies as if the expenditure had been incurred and the person had made such a claim.

3 The declaration ceases to have effect as follows—

a if and to the extent that it is withdrawn before the relevant day, or is superseded before that day by a valid claim under section 198J, on the day on which it is so withdrawn or superseded, and b if and to the extent that it is not so withdrawn or superseded, on the relevant day.

4 On the declaration ceasing to have effect in whole or in part, all necessary adjustments—

a are to be made by making or amending assessments or by repayment or discharge of tax, and b are to be so made despite any limitation on the time within which assessments or amendments may be made.

5 In this section “ the relevant day ” means the fourth anniversary of the last day of the accounting period in which the disposal took place.

6 For the purposes of this section—

a sections (6), (10) and (11) of section 152 apply as they apply for the purposes of that section, except that in subsection (6) the reference to a trade is to be read as a reference to E&A activities or a ring fence trade, and b terms used in this section which are defined in section 198J have the meaning given by that section.