Corporation Tax Act 2010 section 332FA

The closing balance of unactivated allowance for an accounting period

Section 332FA explains how to calculate the closing balance of unactivated (i.e. unused) investment allowance that a company holds for a given accounting period in relation to a qualifying oil field.

• The closing balance of unactivated allowance is calculated using the formula P + Q.
• P is the investment allowance generated by the company in the qualifying oil field during the accounting period, including any amount treated as generated through the acquisition of an equity interest in the field.
• Q is any unactivated allowance carried forward from the immediately preceding accounting period or from the immediately preceding reference period.
• The resulting total represents the pool of unused investment allowance available to the company for that period and field, which may be activated against profits or carried forward to a future period.