Corporation Tax Act 2010 section 332F

Activation of allowance: no change of equity share

Section 332F sets out how a company's investment allowance is activated against its income from a qualifying oil field in an accounting period where there has been no change in the company's equity share in that field.

• The section applies where a company is a licensee in a qualifying oil field, the accounting period is not split into reference periods, the company holds a closing balance of unactivated allowance greater than zero, and it has relevant income from that field.
• The activated allowance is the lowest of three amounts: the closing balance of unactivated allowance, the company's relevant income from the oil field, or (for additionally developed fields) the relevant activation limit.
• Relevant income means production income from oil extraction activities in the field that is included in calculating adjusted ring fence profits, plus any additional categories of income prescribed by Treasury regulations, subject to anti-avoidance rules on tariff receipts.
• The Treasury may make regulations prescribing additional types of relevant income, and may amend this Chapter accordingly; such regulations require approval by the House of Commons and cannot retrospectively remove income from the definition of relevant income.