Part 2

Plant and machinery allowances
Chapter 13

Provisions affecting mining and oil industries

Restrictions on allowances: anti-avoidance

Decommissioning services supplied by connected person
165A
1
Allowances under this Part are restricted under section 165B(1) if—
a
a person (“R”) who is carrying on, or has ceased to carry on, a ring fence trade enters into an arrangement,
b
under the arrangement, a person (“S”) who is connected with R provides a service to R, and
c
all or part of the consideration for the service is decommissioning expenditure.
2
Subsection (1)(b) may be satisfied whether the service is provided to R directly or indirectly; and in particular it does not matter—
a
whether R and S are parties to the same contract, or
b
whether payments are made by R directly to S.
3
Subsections (4) to (9) apply for the purposes of this section and sections 165B to 165E.
4
References to providing a service include—
a
letting a ship on charter or any other asset on hire, and
b
providing goods which are to be used up in the course of providing a service.
5
“
Decommissioning expenditure
” means expenditure in connection with decommissioning.
6
“
Decommissioning
” means—
a
demolishing plant or machinery,
b
preserving plant or machinery pending its reuse or demolition,
c
preparing plant or machinery for reuse, or
d
arranging for the reuse of plant or machinery.
7
It is immaterial for the purposes of subsection (6)(b) whether the plant or machinery is reused, is demolished or is partly reused and partly demolished.
8
It is immaterial for the purposes of subsection (6)(c) and (d) whether the plant or machinery is in fact reused.
9
References to R's expenditure under the arrangement are to so much of the consideration for the service as is decommissioning expenditure incurred by R.
Pt. 2 modified (24.2.2003) by Proceeds of Crime Act 2002 (c. 29), s. 458(1), Sch. 10 para. 12 (with Sch. 10 para. 17(1)); S.I. 2003/120, art. 2, Sch. (with arts. 3 4) (as amended (20.2.2003) by S.I. 2003/333, art. 14)
S. 45H(2) modified (with effect in accordance with s. 167 of the amending Act) by Finance Act 2003 (c. 14) , Sch. 30 para. 7
Pt. 2 restricted (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 4 para. 4 ; S.I. 2004/2575 , art. 2(1) , Sch. 1
Pt. 2 modified (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 9 paras. 9(2), 21(2) (with s. 38(2)); S.I. 2004/2575, art. 2(1) , Sch. 1
Pt. 2 restricted (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 9 paras. 10, 22 (with s. 38(2) ); S.I. 2004/2575 , art. 2(1) , Sch. 1
Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 19
Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 35
Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 paras. 36, 37
Pt. 2 modified (21.7.2009) by Finance Act 2009 (c. 10), s. 24
Pt. 2 modified (17.7.2013) by Finance Act 2013 (c. 29), s. 73(7)-(11) (with s. 73(6))
Ss. 165A-165E and cross-heading inserted (with effect in accordance with Sch. 32 para. 8 of the amending Act) by Finance Act 2013 (c. 29), Sch. 32 para. 2
Pt. 2 modified (10.6.2021) by Finance Act 2021 (c. 26), s. 9(1)(a)