Details of the Section
2.Subsection (1) provides that part 5 of CAA 2001 is amended by subsections (2) to (5).
3.Subsection (2) makes a consequential change to the definition of ‘qualifying expenditure’ in section 395 CAA 2001.
4.Subsection (3) inserts new subsection (2A) into section 403 CAA 2001. The new subsection provides that for the purposes of section 403 expenditure incurred on the restoration of a relevant site is not expenditure on acquiring a mineral asset.
5.Subsection (4) makes consequential changes to section 416 CAA 2001 (expenditure on restoration within 3 years of ceasing to trade).
6.Subsection (5) inserts new section 416ZA (ring fence trades: expenditure on site restoration) and new section 416ZB (‘notional accounting period’) into CAA 2001.
7.Subsection (1) of section 416ZA provides that if certain conditions are met the net cost of the restoration is qualifying expenditure for the relevant period in which that part of the work to which the expenditure relates was carried out.
8.Subsection (2) of section 416ZA provides the meaning of ‘relevant period’.
9.Subsection (3) of section 416ZA provides that the qualifying expenditure for a notional accounting period is treated as incurred on the last day of trading.
10.Subsection (4) of section 416ZA provides that if the expenditure incurred is disproportionate to the work carried out in a relevant period, only so much of the net cost of the restoration as is proportionate is to be treated as qualifying expenditure for that period.
11.Subsection (5) of section 416ZA provides that subsection (4) does not prevent that part of the expenditure that is not allowable expenditure for the period from being treated as qualifying expenditure for a subsequent relevant period.
12.Subsection (6) of section 416ZA provides that if any expenditure is qualifying expenditure:
all the expenditure on the restoration is not deductible in calculating income for tax purposes; and,
none of the amounts subtracted to produce the net cost is to be treated as income for tax purposes.
13.Subsection (7) of section 416ZA provides that ‘restoration’ includes certain activities but does not include decommissioning any plant or machinery.
14.Subsection (8) of section 416ZA provides the meaning of a ‘relevant site’.
15.Subsection (9) of section 416ZA provides the meaning of ‘the net cost of the restoration’.
16.Subsection (10) of section 416ZA provides that all such adjustments are to be made as are necessary to give effect to this section.
17.Subsection (11) of section 416ZA provides the meaning of ‘abandonment programme’, ‘approval’, ‘approved’, ‘foreign sector of the continental shelf’, ‘ring fence trade’, ‘oil’, ‘oil field’ and ‘UK marine area’.
18.Subsection (1) of section 416ZB provides the meaning of ‘notional accounting period’ for the purposes of section 416ZA in relation to a person who has ceased to carry on a ring fence trade.
19.Subsection (2) of section 416ZB provides that there are to be no notional accounting periods after the end of the post-cessation period.
20.Subsection (3) of section 416ZB provides the meaning of ‘termination event’ in relation to a notional accounting period.
21.Subsection (4) of section 416ZB provides the meaning of ‘post-cessation period’.
22.Subsection (5) of section 416ZB provides the meaning of ‘the appropriate authority’.
23.Subsections (6) and (7) of section 416ZB provide further rules in respect of the meaning of ‘termination event’.
24.Subsection (8) of section 416ZB provides that expressions used in section 416ZB have the same meaning as they do in section 416ZA.
25.Subsection (6) makes a consequential change to section 416B (first year qualifying expenditure).
26.Subsection (7) provides that part 4 of CTA 2010 (loss relief) is amended by subsections (8) and (9).
27.Subsection (8) replaces a reference to section 403 CAA 2001 in section 40 CTA 2010 (ring fence trades: extension of periods for which relief may be given) with a reference to section 416ZA.
28.Subsection (9) amends section 43 CTA 2010 (claim period in case of ring fence or mineral extraction trades) to include section 416ZA and to make a consequential amendment.
29.Subsection (10) provides that the amendments made by this section have effect in relation to expenditure incurred on restoration carried out on or after Royal Assent to Finance Act 2013.
