Oil Taxation Act 1983 section Schedule 4 paragraph 3

Chargeable assets in relation to a foreign field

Schedule 4 paragraph 3 defines when a field asset becomes a "chargeable asset" in relation to a participator in a foreign field, which determines whether a disposal or change of use of that asset can give rise to a tax charge.

• A field asset is a chargeable asset for a participator in a foreign field if, on the relevant assumptions, the participator's expenditure on that asset would qualify as allowable expenditure for that foreign field.
• The qualifying expenditure routes are: expenditure on long-term assets under section 3 of the 1983 Act, expenditure under section 4 of the Oil Taxation Act 1975, or — where the asset had an expected useful life exceeding six months — expenditure under section 3 of the 1975 Act.
• There is a special rule for assets that are treated as field assets because of their connection to another asset: these inherit their chargeable asset status from the linked asset and are chargeable in relation to the same participator and the same foreign field.
• The concept of a "chargeable asset" is important because it is the gateway to determining whether a disposal proceeds charge or deemed disposal charge arises when the asset leaves use in the foreign field.

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