Corporation Tax Act 2010 section 355B

Large shallow water gas field

Section 355B defines what constitutes a "large shallow water gas field" for the purposes of the ring fence expenditure supplement rules, which provide additional tax relief for companies involved in oil and gas extraction in the UK and UK Continental Shelf.

• A large shallow water gas field is an oil field where at least 75% of the reserves (by volume) are gas, the field lies wholly in water depths of less than 30 metres, and the field's expected reserves are at least 280 billion cubic feet of gas equivalent.
• This definition is relevant to the calculation of the ring fence expenditure supplement, which gives companies an uplift on qualifying losses carried forward, effectively compensating them for the long lead times and high costs of developing oil and gas projects.
• The provision was introduced by Finance Act 2015, Schedule 12, paragraph 3, reflecting the government's intention to provide targeted fiscal support for the development of large but technically challenging gas fields in shallow waters.
• The classification of a field as a large shallow water gas field may affect the rate or amount of ring fence expenditure supplement available, distinguishing it from other categories of oil and gas field for corporation tax purposes.