Oil Taxation Act 1975 section Schedule 3 paragraph 11A

Transfers of interests in oil fields: post-transfer decommissioning expenditure

Paragraph 11A ensures that when an interest in an oil field is transferred with OGA consent on or after 1 November 2018, decommissioning expenditure associated with that field remains eligible for petroleum revenue tax relief despite the change in ownership.

• Where the OGA consents to a transfer of an oil field interest on or after 1 November 2018, decommissioning costs funded by the old participator but incurred by the new participator are not disqualified from relief as subsidised expenditure.
• If the old participator ceases to be a licensee or participator in the field after the transfer period, any decommissioning expenditure they subsequently incur is treated as if the new participator had incurred it, preserving tax relief eligibility.
• Where there has also been a transfer of another interest in the same field between the same parties that did not receive OGA consent on or after 1 November 2018, only a just and reasonable proportion of the decommissioning expenditure qualifies for these favourable rules.
• If there are subsequent transfers of interests in the same oil field, the rules extend so that each prior transferor in the chain is treated as an "old participator," ensuring the relief provisions apply through successive transfers.