Oil Taxation Act 1975 Schedule 3 paragraph 9

Election to have amounts mentioned in section 2(9)(b) and (c) spread

Schedule 3 paragraph 9 allows a participator to elect to spread certain deductible amounts — specifically licence payments and past exploration or development expenditure — over several chargeable periods rather than claiming them all in a single period.

• A participator may elect to spread licence-related payments and certain exploration or development expenditure across multiple chargeable periods instead of deducting them in one go.
• The election must be made to HMRC and applies to amounts that would otherwise be allowable under section 2(9)(b) (licence payments) or section 2(9)(c) (past expenditure) for a particular oil field.
• Where an election is made, the total amount is divided into equal instalments over consecutive chargeable periods, beginning with the period in which the amount would originally have been deductible.
• The effect is to smooth the impact of large one-off deductions, spreading the tax relief more evenly over time rather than concentrating it in a single period.

---