Oil Taxation Act 1983 section Schedule 1 paragraph 9

Reduction of allowable expenditure when a mobile asset becomes dedicated to an oil field

Schedule 1 paragraph 9 prevents a double tax relief by reducing the expenditure allowable for a mobile asset that becomes dedicated to an oil field, where some of that expenditure has already been relieved under the general expenditure provisions of the Oil Taxation Act 1975.

• Where expenditure on a mobile asset has already been allowed (or is allowable) under section 4 of the Oil Taxation Act 1975, and that asset subsequently becomes dedicated to an oil field, the amount that can be claimed under the principal section must be reduced accordingly.
• The reduction equals the amount of expenditure that has already been allowed or is allowable under section 4 of the 1975 Act, ensuring there is no duplication of relief.
• This anti-duplication rule does not apply where paragraph 7 of Schedule 1 already applies to the asset and paragraph 7(4) has itself reduced the allowable expenditure — in other words, where a separate adjustment mechanism has already taken effect.
• The provision therefore acts as a backstop: it catches cases of potential double relief that are not already dealt with by the paragraph 7 reduction rules.

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