Capital Allowances Act 2001 section 104G

Disposal events in respect of cushion gas

Section 104G establishes how disposal events relating to cushion gas in a gas storage facility are treated when the expenditure on that gas includes both pre- and post-April 2010 costs.

• Where cushion gas expenditure includes both new (on or after 1 April 2010) and old (before 1 April 2010) costs, any disposal is treated as relating to the new-expenditure gas first
• A disposal may end up relating only to new-expenditure gas, only to old-expenditure gas, or to a combination of both, depending on the quantity disposed of
• Where a single disposal straddles both categories, it is split into two separate disposal events — one for the new-expenditure gas and one for the old-expenditure gas
• Cushion gas is the minimum volume of gas that must remain in a storage facility to maintain adequate pressure for extraction of the working gas