Oil Taxation Act 1983 section 1

Expenditure incurred on non-dedicated mobile assets

Section 1 restricts the relief available under section 4 of the Oil Taxation Act 1975 (the principal Act) for capital expenditure on long-term assets, so that from 1 July 1982 onwards, section 4 relief only applies to mobile assets that are not dedicated to a particular oil field.

• From 1 July 1982, the long-term asset allowance under section 4 of the 1975 Act is restricted to non-dedicated mobile assets — that is, mobile assets not permanently assigned to a single oil field.
• Where section 4 does apply to a non-dedicated mobile asset, it operates with a number of technical modifications, including the removal of several original subsections and revised definitions referencing the 1983 Act.
• If a non-dedicated mobile asset later becomes dedicated to a specific oil field, the section 4 relief ceases for overlapping claim periods where the expenditure qualifies instead under section 3 of the 1983 Act, which governs dedicated long-term assets.
• The disposal rules in paragraph 4 of Schedule 4 to the 1975 Act (which reduce allowable expenditure when a long-term asset is sold) only apply after 30 June 1982 if the asset disposed of is a non-dedicated mobile asset.

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