The Petroleum Revenue Tax (Nomination Scheme for Disposals and Appropriations) (Amendment) Regulations 2006

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Petroleum Revenue Tax (Nomination Scheme for Disposals and Appropriations) Regulations 1987 (S.I. 1987/1338: “the principal Regulations”) (in future to be called the Oil Taxation (Nomination Scheme for Disposals) Regulations 1987).

Sections 149 and 150 of the Finance Act 2006 (c. 25) amend section 61 of and Schedule 10 to the Finance Act 1987 (which provides for participators in oil fields to nominate proposed sales of oil). The nomination scheme previously had effect only for Petroleum Revenue Tax purposes but under section 151 of the Finance Act 2006 it will have effect for Oil Taxation purposes generally including ring fence Corporation Tax and Supplementary Charge purposes.

Regulation 1 provides for citation, commencement, and effect. The power to make the retrospective provision contained in regulation 1(2) is contained in section 61(8) of the Finance Act 1987 (as amended by section 149(5) of the Finance Act 2006).

Regulation 2 provides for amendment of the principal Regulations, and regulation 3 for their renaming. Regulations 3 to 14 make technical amendments to the principal Regulations.

Regulation 5 provides that proposed sales other than under a Brent-Forties-Oseberg Forward contract are excluded from section 61 of the Finance Act 1987 (and the nomination scheme).

Regulation 6 makes amendments to the manner of making nominations (the primary manner is by e-mail except in the case of disruption of e-mails when telephone facsimile may be used).

Regulation 9 defines the transaction base time for a proposed sale of oil. Regulation 11 amends the maximum volume tolerance from 5% to 1% (in line with the Brent-Forties-Oseberg Forward contract).

A regulatory impact assessment was prepared by HM Revenue and Customs in respect of Part 5 of the Finance (No. 2) Bill of the 2005-06 Session and was published on 22^nd March 2006. That Bill received Royal Assent as the Finance Act 2006.