Oil Taxation Act 1983 section 8

Assessable profit or allowable loss from a foreign field

Section 8 of Schedule 4 establishes how to determine the assessable profit or allowable loss accruing to a participator from a foreign oil field, including the treatment of chargeable receipts and the prevention of double counting where receipts could be attributed to both a foreign field and a UK field.

• For each chargeable period (starting from the period in which a participator first has chargeable receipts from a foreign field), an assessable profit or allowable loss must be calculated broadly in line with the normal petroleum revenue tax rules under section 2 of the Oil Taxation Act 1975.
• The positive amounts in the computation are the participator's chargeable receipts from the foreign field for that period, while the negative amounts are the specific deductions listed in section 2(9)(b), (c) and (f) of the 1975 Act — broadly covering allowable expenditure, certain losses and related items.
• A tariff receipts allowance applies when computing the profit or loss from a foreign field, treating most chargeable receipts (other than disposal receipts) as if they were tariff receipts for the purpose of the allowance.
• Anti-double-counting rules ensure that where the same consideration could be treated both as a chargeable receipt of a foreign field participator and as a tariff or disposal receipt of a UK field participator (or vice versa), it is only counted once — in whichever category it first properly falls.