Capital Allowances Act 2001 section 163

Meaning of "general decommissioning expenditure"

Section 163 defines what counts as "general decommissioning expenditure" for the purposes of claiming capital allowances in relation to oil and gas ring fence trades.

• Expenditure qualifies if it is incurred on decommissioning plant or machinery used in a ring fence trade that forms part of an offshore installation, submarine pipeline, or relevant onshore installation, and the plant or machinery is not replaced
• Expenditure also qualifies if incurred in complying with an approved abandonment programme, in anticipation of a decommissioning measure, in preparing an abandonment programme for approval, or in connection with conditions or agreements made with the Secretary of State
• Where the plant or machinery was not used wholly for qualifying purposes at any time, the amount of qualifying expenditure is reduced to an amount that is just and reasonable, having particular regard to the extent of non-qualifying use
• "Decommissioning" covers demolishing, preserving, preparing for reuse, or arranging for reuse of plant or machinery, and it does not matter whether the plant or machinery is ultimately reused or demolished