Corporation Tax Act 2010 section 284

Valuation where relevant appropriation but no disposal

Section 284 deals with how to value oil for corporation tax purposes when an oil-producing company does not sell the oil to a third party but instead takes it into use in another part of its own business, such as refining.

• When a company appropriates oil for its own use rather than selling it, a deemed sale and purchase at market value must be recognised for corporation tax purposes
• The oil is treated as sold within the ring fence trade (oil-related activities) and simultaneously purchased by the company's non-ring fence trade at the same market value
• The market value used is the same value that applies (or would apply) for petroleum revenue tax purposes under the Oil Taxation Act 1975
• Both conditions must be met: the company must make a relevant appropriation of oil without disposing of it, and the market value must fall to be taken into account for petroleum revenue tax calculations