1(1)Expenditure incurred by any person m the acquisition of an asset is not allowable under section 3 or 4 of this Act for an oil field if expenditure previously incurred by another person in acquiring, bringing into existence, or enhancing the value of that asset is allowable under that section for that field.
Section 4(13) of this Act applies to the preceding provisions of this sub-paragraph.
(2)Sub-paragraph (1) above shall, with any necessary modifications, have effect in relation to expenditure incurred by a person—
(a)in renting or hiring an asset or any interest in an asset; or
(b)for the provision of services or other business facilities of whatever kind; or
(c)for the grant or transfer to him of any right, licence or interest (other than an interest in an asset),
as it has effect in relation to expenditure incurred in the acquisition of, or of an interest in, an asset.
2(1)Where a person has incurred expenditure in the acquisition of an asset in a transaction to which this paragraph applies, he shall be treated for the purposes of sections 3 and 4 of this Act as having incurred that expenditure only to the extent that it does not exceed expenditure (other than expenditure in respect of interest or any other pecuniary obligation incurred in obtaining a loan or any other form of credit) incurred by another person in acquiring, bringing into existence, or enhancing the value of that asset in a transaction to which this paragraph does not apply (or, if there has been more than one such transaction, the later or latest of them). Section 4(13) of this Act applies to the preceding provisions of this sub-paragraph.
(2)This paragraph applies to any transaction between connected persons and to any transaction made otherwise than at arm's length ; and for the purposes of this paragraph a person is connected with another person if—
(a)they are connected within the meaning of section 533 of the Taxes Act; or
(b)they are both participators in the oil field in question; or
(c)one of them is a participator in that field and the other is connected (within the meaning of the said section 533) with another participator in that field.
(3)Sub-paragraph (2) of paragraph 1 above shall apply in relation to sub-paragraph (1) above as it applies in relation to sub-paragraph (1) of that paragraph.
3(1)This paragraph applies in the case of any oil field from which oil began to be won in commercial quantities before 13th November 1974.
(2)Expenditure incurred before that date which, apart from this paragraph, would be allowable under section 3 or 4 of this Act for an oil field shall be so allowable only to the extent that it was incurred—
(a)in connection with that field for one or more of the purposes mentioned in paragraphs (a) to (c) of section 3(1) of this Act; or
(b)in acquiring, bringing into existence, or enhancing the value of an asset used on or after that date in connection with the field.