3U.K.In Schedule 3 to OTA 1975 (petroleum revenue tax: miscellaneous provisions), in paragraph 8 (certain subsidised expenditure to be disregarded), after sub-paragraph (1) insert—
“(1A)But sub-paragraph (1) above does not apply to any expenditure for which the relevant participator is liable that has been or is to be met directly or indirectly out of a payment made by the guarantor under an abandonment guarantee.
(1B)In sub-paragraph (1A) above—
“abandonment guarantee” has the same meaning as it has for the purposes of section 3 of this Act (see section 104 of the Finance Act 1991), and
“the guarantor” and “the relevant participator” have the same meaning as in section 104 of that Act.”
4U.K.In Schedule 5 to OTA 1975 (allowance of expenditure), in paragraph 2C(2), in the definition of “sum in default”, for the words from “less the aggregate of” to the end substitute “ less so much of that payment as has been made by the defaulter ”.
5(1)Part 3 of FA 1991 (oil taxation) is amended as follows.U.K.
(2)Omit section 105 (restriction of expenditure relief by reference to payments under abandonment guarantees).
(3)Omit section 106 (relief for reimbursement expenditure under abandonment guarantees).
6(1)In Part 2 of ITTOIA 2005 (trading income), Chapter 16A (oil activities) is amended as follows.U.K.
(2)In section 225N (expenditure on and under abandonment guarantees), omit subsections (3) and (4).
(3)Omit section 225O (relief for reimbursement expenditure under abandonment guarantees).
7(1)In Part 8 of CTA 2010 (oil activities), Chapter 4 (calculation of profits) is amended as follows.U.K.
(2)In section 292 (expenditure on and under abandonment guarantees), omit subsections (3) and (4).
(3)Omit section 293 (relief for reimbursement expenditure under abandonment guarantees).