Corporation Tax Act 2010 section 339

Unactivated amount of field allowance

Section 339 provides the rules for determining the unactivated amount of a company's field allowance when the allowance has been obtained either as an initial licensee or through an acquisition of field allowance from another company.

• When a company first receives a field allowance (as an initial licensee), the full amount of the field allowance is treated as unactivated.
• When a company acquires a field allowance from another party, the unactivated amount is whatever portion of the allowance remained unactivated in the hands of the transferring company at the point of transfer.
• The unactivated amount represents the portion of the field allowance that has not yet been used to reduce the company's adjusted ring fence profits for corporation tax purposes.
• Tracking the unactivated amount is essential because it determines how much relief remains available to reduce future taxable profits from the relevant oil or gas field.