Capital Allowances Act 1990 (repealed)

[F1 62A Special allowance for [F2 decommissioning] costs related to offshore machinery or plant. U.K.

(1) Subject to subsection (3) below, this section applies to expenditure which, apart from this section, would fall within section 62(1)(b) [F3 or 62AA(3)] 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 [F4 decommissioning] machinery or plant which has been brought into use for the purposes of that trade and which is or forms part of[F5 , or when last in use for the purposes of the trade was or formed 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 [F6 decommissioning] is a reference to [F6 decommissioning] which is carried out, wholly or substantially, in order to comply with an abandonment programme, within the meaning of [F7 Part IV of the Petroleum Act 1998], 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.

[F8 (3A) In this section “decommissioning”, in relation to any machinery or plant, means—

(a) demolishing the machinery or plant,

(b) preserving the machinery or plant pending its reuse or demolition,

(c) preparing the machinery or plant for reuse, or

(d) arranging for the reuse of the machinery or plant.

(3B) For the purposes of this section—

(a) in determining whether expenditure is incurred on preserving machinery or plant pending its reuse or demolition, it is immaterial whether the machinery or plant is reused, is demolished or is partly reused and partly demolished; and

(b) in determining whether expenditure is incurred on preparing machinery or plant for reuse, or on arranging for the reuse of machinery or plant, it is immaterial whether the machinery or plant is in fact reused.]

[F9 (4) If the person incurring any abandonment expenditure so elects, for the chargeable period in which that expenditure is incurred there shall be made to that person an allowance equal to so much of the abandonment expenditure to which the election relates as is incurred in that period.

(4A) If a person makes such an election, neither of sections 62(1)(b) and 62AA(3) applies.

(4B) If machinery or plant is demolished, the total of any allowances under subsection (4) above in respect of expenditure on the decommissioning of the machinery or plant is reduced by the amount of any moneys received for the remains of the machinery or plant.

(4C) Effect is given to subsection (4B) above by setting the amount (until wholly utilised)—

• first, against any allowance under subsection (4) above for the chargeable period in which the amount is received (as previously reduced in giving effect to subsection (4B));

• second, against allowances under that subsection for earlier chargeable periods (as so reduced and taking later such periods before earlier ones); and

• third, against allowances under that subsection for later chargeable periods (as so reduced and taking earlier such periods before later ones).]

(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 [F10 subsection (4B)] 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 F11 ... ends after 30th June 1991.]

Textual Amendments

F1 Ss. 62A, 62B inserted by Finance Act 1990 (c. 29), s. 60

F2 Word in s. 62A sidenote substituted (retrospective and with application in accordance with Sch. 20 para. 4 of the amending Act) by Finance Act 2001 (c. 9), Sch. 20 para. 2(8)

F3 Words in s. 62A(1) inserted (retrospective and with application in accordance with Sch. 20 para. 4 of the amending Act) by Finance Act 2001 (c. 9), Sch. 20 para. 2(2)

F4 Word in s. 62A(1)(c) substituted (retrospective and with application in accordance with Sch. 20 para. 4 of the amending Act) by Finance Act 2001 (c. 9), Sch. 20 para. 2(3)(a)

F5 Words in s. 62A(1)(c) inserted (retrospective and with application in accordance with Sch. 20 para. 4 of the amending Act) by Finance Act 2001 (c. 9), Sch. 20 para. 2(3)(b)

F6 Word in s. 62A(3)(a) substituted (retrospective and with application in accordance with Sch. 20 para. 4 of the amending Act) by Finance Act 2001 (c. 9), Sch. 20 para. 2(4)

F7 Words in s. 62A(3)(a) substituted (15.2.1999) by Petroleum Act 1998 (c. 17), s. 52(4), Sch. 4 para. 27(2); S.I. 1999/161, art. 2(1)

F8 S. 62A(3A)(3B) inserted (retrospective and with application in accordance with Sch. 20 para. 4 of the amending Act) by Finance Act 2001 (c. 9), Sch. 20 para. 2(5)

F9 S. 62A(4)-(4C) substituted for s. 62A(4) (retrospective and with application in accordance with Sch. 20 para. 4 of the amending Act) by Finance Act 2001 (c. 9), Sch. 20 para. 2(6)

F10 Words in s. 62A(5)(a) substituted (retrospective and with application in accordance with Sch. 20 para. 4 of the amending Act) by Finance Act 2001 (c. 9), Sch. 20 para. 2(7)

F11 Words in Act repealed (with effect in accordance with s. 211(2) of the amending Act) by Finance Act 1994 (c. 9), s. 213(1), Sch. 26 Pt. 5(24)