Section 80: Decommissioning Relief Agreements
Summary
1.Section 80 provides that payments due under decommissioning relief agreements shall be made out of money provided by Parliament. It further provides some exceptions to the duty imposed by section 18(1) of the Commissioners for Revenue and Customs Act 2005.
Details of the Section
2.Subsection (1) provides that sums due under a decommissioning relief agreement shall be paid out of money provided by Parliament.
3.Subsection (2) defines a “decommissioning relief agreement” as an agreement between a Minister of the Crown and a qualifying company.
4.Subsection (3) defines a “qualifying company” for the purposes of a subsection (2).
5.Subsection (4) provides that for the purposes of subsection (2) the amount of tax relief in respect of decommissioning expenditure is to be determined in accordance with the decommissioning relief agreement, and may in some circumstances, which will be specified in the decommissioning relief agreement include tax relief in respect of expenditure that is not decommissioning expenditure.
6.Subsection (5) provides that a payment made under a decommissioning relief agreement is not to be regarded as income or a gain for the company for any purpose of the Tax Acts.
7.Subsection (6) provides that Section 18 (1) of the Commissioners for Revenue and Customs Act 2005, which restricts disclosure by Revenue and Customs officials, does not prevent disclosure of information to:
a Minister of the Crown for the purposes of enabling that Minister to establish the extent of any liability under a decommissioning relief agreement; or,
a party that has rights under a decommissioning relief agreement for the purposes of enabling that party to determine the reference amount.
8.Subsection (7) provides definitions , for the purposes of this section, for “company”, “cross-boundary field”, “decommissioning expenditure”, Minister of the Crown”, which includes HM Treasury, “ring fence trade”, the UK sector of a cross-boundary field” and “unitisation agreement”.
9.Subsection (8) provides that subsections (8) to (9) of section 30 of the Petroleum Act 1998, which define associated entity, apply for the purposes of subsection (1) of this section.
Background
10.The amendments made by this section form part of the Government’s wider package of measures to provide greater certainty in respect of decommissioning tax relief, remove barriers to the transfer of licence interests and increase capacity for additional investment in the UK Continental Shelf.
