Oil Taxation Act 1983 section 10

Restrictions on allowable expenditure for foreign field assets generating chargeable receipts

Section 10 of Schedule 4 restricts the types of expenditure on long-term field assets that can be allowed as relief when determining whether receipts from a foreign field are chargeable to UK petroleum revenue tax.

• Expenditure on a long-term field asset is only allowable if the asset is a chargeable asset that generates, or is expected to generate, chargeable receipts.
• The expenditure must be incurred either to enable the asset to be used in a way that produces chargeable receipts (from use or provision of services), or to enhance the asset's value ahead of its disposal.
• Where expenditure serves both qualifying and non-qualifying purposes, only a just and reasonable proportion attributable to the qualifying purpose may be allowed.
• A field asset is only treated as used in connection with the foreign field to the extent that its related expenditure meets both of these qualifying conditions.

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