22U.K.In Chapter 16A of Part 2 of ITTOIA 2005 (trading income: oil activities), after section 225U insert—
(1)This section applies if—
(a)a person that is or has been carrying on a ring fence trade (“the defaulter”) has defaulted on a liability under—
(i)a relevant agreement, or
(ii)an abandonment programme,
to make a payment towards decommissioning expenditure,
(b)another person that is or has been carrying on a ring fence trade (“the contributing person”) pays an amount (“the relevant contribution”) in or towards meeting the whole or part of the default, and
(c)the amount of the relevant contribution is less than the sum of the amounts within subsection (2).
(2)The amounts within this subsection are—
(a)any payments made (directly or indirectly) to the contributing person by the guarantor under an abandonment guarantee as a result of the defaulter defaulting on the liability,
(b)any reimbursement payments, and
(c)any relief from tax which the contributing person obtains in respect of the relevant contribution.
(3)The difference between—
(a)the sum of the amounts within subsection (2), and
(b)the relevant contribution,
(“the relevant difference”) is to be treated as a receipt (in the nature of income) of the contributing person's ring fence trade for the relevant tax year (see subsection (4)).
(4)“The relevant tax year” means the tax year that includes the day on which the Secretary of State certifies that the relevant abandonment programme has been satisfactorily completed (“the certification date”).
This is subject to subsection (5).
(5)If the contributing person's ring fence trade is permanently discontinued before the certification date, “the relevant tax year” is the last tax year in which that trade is carried on.
(6)The relevant difference is to be determined—
(a)in a case where subsection (5) applies, at the end of the tax year in which the certification date falls, and
(b)in any other case, at the end of the relevant tax year.
(7)In a case where subsection (5) applies, any income tax chargeable for the relevant tax year by virtue of this section is due and payable for the tax year in which the certification date falls.
(8)Any additional assessment to income tax required in order to take account of a receipt arising under this section may be made at any time not later than 4 years after the end of the tax year in which the certification date falls.
(9)In this section—
“abandonment programme” means an abandonment programme approved under Part 4 of the Petroleum Act 1998 (including such a programme as revised),
“decommissioning expenditure” has the meaning given by section 330C of CTA 2010,
“reimbursement payment” means any payment made to the contributing person by the defaulter in reimbursing the contributing person in respect of, or otherwise making good to the contributing person, the whole or any part of the relevant contribution,
“the relevant abandonment programme” means the abandonment programme in respect of which the decommissioning expenditure mentioned in subsection (1)(a) was incurred, and
“relevant agreement” has the meaning given by section 104(5)(a) of FA 1991.”