C1Part II Machinery and Plant
Chapter VII Miscellaneous Expenditure
62AF1 Special allowance for demolition costs related to offshore machinery or plant.
1
Subject to subsection (3) below, this section applies to expenditure which, apart from this section, would fall within section 62(1)(b) and which is incurred—
a
by any person carrying on a ring fence trade; and
b
for the purposes of or in connection with the closing down of, or of any part of, an oil field, within the meaning of Part I of the Oil Taxation Act 1975; and
c
on the demolition of machinery or plant which has been brought into use for the purposes of that trade and which is or forms part of an offshore installation or a submarine pipe-line;
and in this section any such expenditure is referred to as “abandonment expenditure".
2
In this section “ring fence trade” means activities which—
a
fall within any paragraphs (a) to (c) of subsection (1) of section 492 of the principal Act (treatment of oil extraction activities etc. for tax purposes); and
b
constitute a separate trade (whether by virtue of that subsection or otherwise).
3
In subsection (1)(c) above—
a
the reference to demolition is a reference to demolition which is carried out, wholly or substantially, in order to comply with an abandonment programme, within the meaning of Part I of the Petroleum Act 1987, or with any condition to which the approval of such a programme is subject; and
b
“offshore installation” and “submarine pipeline” have the same meaning as in that Part.
4
If the person incurring any abandonment expenditure so elects,—
a
for the chargeable period related to the incurring of that expenditure there shall be made to that person an allowance equal to the excess of the abandonment expenditure to which the election relates over any moneys received for the remains of the machinery or plant concerned; and
b
that excess shall not be taken into account to increase qualifying expenditure as mentioned in section 62(1)(b).
5
An election under this section—
a
shall specify the abandonment expenditure to which it relates and the amounts of any such moneys received as mentioned in subsection (4)(a) above;
b
shall be made by notice in writing given to the inspector not later than two years after the end of the chargeable period related to the incurring of the abandonment expenditure; and
c
shall be irrevocable.
6
This section has effect where the chargeable period related to the incurring of the expenditure or its basis period ends after 30th June 1991.
Pt. II (ss. 22–83) modified by Finance Act 1990 (c. 29), s. 87(3)(4)