Capital Allowances Act 2001 section 169

Expenditure on plant or machinery incurred by participator

Section 169 extends the capital allowances treatment for production sharing contracts to participators — persons who acquire an interest in the contract from the contractor or from someone who obtained it from the contractor — so that their expenditure on plant or machinery can qualify for plant and machinery allowances.

• A participator is someone who acquires an interest in a production sharing contract, either directly from the contractor or indirectly through another party, and incurs capital expenditure on plant or machinery for oil extraction purposes under that contract.
• The expenditure must be proportionate to the value of the participator's interest under the contract, and the plant or machinery must be transferred to the government or its representative as required by the contract.
• Despite the transfer of ownership to the government, the plant or machinery is treated as still owned by the participator for capital allowances purposes, allowing the expenditure to qualify for allowances that would otherwise be denied.
• This deemed ownership continues until the government or representative ceases to own the plant or machinery, or it ceases to be used or held for use by any person under the contract.