Corporation Tax Act 2010 section 347

Acquisition of field allowance if equity acquired

Section 347 provides the calculation of field allowance where a company (the transferee) acquires an equity interest in a new oil field.

• When a company acquires an equity interest in a new oil field, it may receive a share of the field allowance associated with that field.
• The transferee's field allowance is calculated based on the proportion of equity acquired in the oil field.
• The allowance the transferee receives corresponds to its equity share, drawn from the total field allowance available for that particular oil field.
• This mechanism ensures that when ownership interests in new oil fields change hands, the associated tax relief in the form of field allowance follows the equity to the new holder in proportion.