Corporation Tax Act 2010 section 332FB

Activation limit for former additionally-developed fields

Section 332FB sets a cap on how much field allowance a company can activate in a given accounting period for oil fields that were classified as additionally-developed before 1 April 2015.

• The section applies where an oil field was an additionally-developed field before 1 April 2015 due to a qualifying project, and that project is not an "excluded project"
• The activation limit is calculated as the closing balance of unactivated allowance the company would hold if the transitional conversion rules in Schedule 12 to Finance Act 2015 had never applied to any allowance linked to that project
• A project is "excluded" if either substantial work has been done and the accounting period falls on or after the year of expected first production, or the accounting period begins on or after the date the project was materially completed
• The "year of expected first production" is the calendar year notified to the Secretary of State, on or before the project's authorisation date, as the year additional oil reserves were expected to first be produced from the field