Capital Allowances Act 2001 section 165B

Restriction on allowance available

Section 165B restricts the amount of qualifying expenditure a person (R) can claim for plant and machinery allowances when decommissioning services are provided by a connected person (S) and the cost paid exceeds the actual cost of providing those services.

• Any excess of R's expenditure under the arrangement over D (the cost to S of providing the service) is excluded from R's available qualifying expenditure
• D is defined as S's actual cost of providing the service, or the relevant part of it if R's expenditure relates to only part of the service
• Sections 165C and 165D modify how D is calculated in certain circumstances, such as services related to decommissioning or where decommissioning is undertaken for other participators in an oil field
• Where more than one connected person provides the same service or part of a service to R, D is set at the lowest of the amounts that would otherwise apply