Oil Taxation Act 1983 section 6

Allocation of allowable expenditure where a new asset serves multiple oil fields

Section 6 of Schedule 1 deals with how allowable expenditure on a new asset is attributed to a specific oil field when that asset is used (or expected to be used) in connection with more than one oil field, and no other apportionment rule already applies.

• Where a new asset is used or expected to be used in connection with two or more oil fields, and no apportionment has already been made under paragraph 5, the full allowable expenditure must be attributed to a single field.
• The expenditure is attributed to the field in which the purchaser is a participator; if the purchaser participates in more than one of the relevant fields, it is attributed to the field for which a development decision was made earliest.
• The timing of a development decision is determined in accordance with section 5A(7) of the Oil Taxation Act 1975, which defines when such a decision is taken to have been made.
• Section 8(3A) of the Oil Taxation Act 1983, which provides rules for attributing receipts to oil fields, also applies for the purpose of identifying the correct field under this provision.