Capital Allowances Act 2001 section 162

Ring fence trade a separate qualifying activity

Section 162 establishes that a ring fence trade in oil-related activities is treated as a separate qualifying activity for capital allowances purposes.

• A ring fence trade carried on by a person is treated as a separate qualifying activity for plant and machinery allowances
• A ring fence trade consists of activities that fall within the statutory definition of "oil-related activities" for income tax or corporation tax purposes
• Those oil-related activities must also constitute a separate trade, whether by operation of statute or otherwise
• The effect is to keep capital allowances for oil extraction and related upstream activities separate from those of any other trade the person carries on