Corporation Tax Act 2010 section 292

Expenditure on abandonment guarantees

Section 292 provides corporation tax relief for oil field participators who incur expenditure on obtaining abandonment guarantees to cover their share of future decommissioning costs.

• Expenditure incurred by a participator in an oil field on obtaining an abandonment guarantee is eligible for tax relief where it is allowable (wholly or partly) for petroleum revenue tax purposes.
• The relief also applies where the expenditure would be allowable but the oil field is classified as a non-taxable oil field under Part 3 of the Finance Act 1993.
• The allowable expenditure can be deducted in calculating the participator's ring fence income for corporation tax purposes.
• Key terms — "abandonment guarantee", "the guarantor" and "the relevant participator" — take their meanings from section 104 of the Finance Act 1991.