Oil Taxation Act 1983 section 10

Schedule 2 paragraph 10 — Proportionate reduction of disposal receipts where deballasting reduces allowable expenditure

Schedule 2 paragraph 10 provides that where allowable expenditure on an asset has been reduced because of the deballasting provisions, any disposal receipt for that asset must be reduced by the same proportion.

• This paragraph applies where the deballasting provisions in section 4(2) have reduced the expenditure allowable under section 3(4) in respect of an asset.
• If a disposal receipt is received or becomes receivable in respect of that same asset, the receipt must also be scaled down.
• The disposal receipt is reduced in the same proportion as the original expenditure was reduced by the deballasting provision.
• This ensures a fair and consistent treatment so that the participator is not taxed on a full disposal receipt when only a reduced amount of expenditure was allowed in the first place.

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