Corporation Tax Act 2010 section 356C

Generation of onshore allowance

Section 356C explains how companies generate onshore allowance when they incur qualifying capital expenditure on onshore oil sites, including the rate of allowance, the conditions for expenditure to qualify, and how expenditure is attributed to particular sites.

• A company that incurs relievable capital expenditure on a qualifying site holds an onshore allowance equal to 75% of that expenditure
• A qualifying site is one whose development was first authorised on or after 5 December 2013
• Capital expenditure is only relievable if it is incurred for onshore oil-related activities and neither of the disqualifying conditions is met at the start of the day the expenditure is incurred
• Where expenditure is only partly for onshore oil-related activities or only partly relates to a particular site, it must be apportioned to the site on a just and reasonable basis