Energy (Oil and Gas) Profits Levy Act 2022 section 4

Meaning of "leasing expenditure"

Section 4 defines what counts as "leasing expenditure" for the purposes of the additional investment expenditure relief under section 2 of the Act, setting out the conditions that must be met and the restrictions that apply.

• Leasing expenditure is payment for a mobile production or storage asset made available under a lease of at least 5 years, provided no relevant tax relief has already been obtained on the acquisition of that asset.
• The amount qualifying as leasing expenditure is reduced by amounts the company (and its associated companies) have received under qualifying leases, subject to certain exceptions for payments between associated companies and amounts already offset.
• For subleases entered into or modified on or after 26 May 2022, the sublessee's leasing expenditure cannot exceed the total leasing expenditure incurred under the head lease during the sublease term.
• Where expenditure only partly represents payment for a mobile production or storage asset being made available, a just and reasonable apportionment must be made.