Corporation Tax Act 2010

Field allowance: when held and unactivated amount

337 Initial licensee to hold a field allowance

(1) A company that is an initial licensee in a new oil field is to hold a field allowance for that field as from the beginning of the authorisation day.

(2) The amount of the field allowance which the licensee is to hold at that time is—

TxS

where—

• T is the amount of the total field allowance for the field (see section 356), and

• S is the share of the equity in the field which the initial licensee has at the beginning of the authorisation day.

338 Holding a field allowance on acquisition of equity share

For provision about holding a field allowance by virtue of the acquisition of a share of the equity in a new oil field, see section 347(2).

339 Unactivated amount of field allowance

(1) This section applies if a company holds a field allowance for a new oil field by virtue of section 337 or 347(2).

(2) The unactivated amount of that allowance at a particular time (“the relevant time”) is—

(R + E) − (A + D)

where—

• R is the amount of the field allowance which the company held before the relevant time by virtue of section 337 or 347(2),

• E is the total amount of the field allowance received before the relevant time by virtue of section 347(1) (company already holding field allowance acquires equity share),

• A is the total amount of the field allowance activated in respect of —

  (a)

  accounting periods ending before the relevant time, or

  (b)

  reference periods ending before the relevant time, and

• D is the total amount of reductions in the field allowance made before the relevant time by virtue of section 346 (company disposes of equity share).

(3) A company ceases to hold a field allowance for a new oil field if the unactivated amount of that allowance falls to nil.