What is the purpose of section 13 of the Oil Taxation Act 1983?

Section 13 provides transitional rules bridging the old and new petroleum revenue tax regimes. It ensures that expenditure incurred and claims begun before the 1983 Act took effect are recognised under the revised framework, while preventing double relief by deducting amounts already allowed under the previous legislation.

How do the transitional provisions prevent double relief for PRT expenditure?

The transitional provisions require that any expenditure already relieved under the old PRT rules is netted off when claims are brought into the new framework. For example, if £6 million of £10 million was already allowed, only the remaining £4 million could be claimed under the revised regime, ensuring total relief matches genuine entitlement.

Were the transitional provisions in section 13 subsequently amended?

Yes. The Finance Act 2009, through Schedule 45 paragraph 2(4), amended the transitional provisions to align them with modernised PRT administrative and assessment procedures. These updates ensured the transitional mechanics continued to function correctly within the updated legislative framework governing petroleum revenue tax.

Are the section 13 transitional provisions still relevant today?

For most current purposes they are largely historical. However, they remain relevant where legacy PRT positions for older oil fields are being reviewed, adjusted, or disputed. Understanding these bridging rules is important when reconciling historic PRT computations involving expenditure that straddled the 1983 changeover.

Oil Taxation Act 1983 section 13

Transitional provisions

Section 13 provides transitional rules for the shift from the old petroleum revenue tax (PRT) regime to the revised framework introduced by the Oil Taxation Act 1983, ensuring that expenditure claims and allowances straddling the changeover are handled fairly.

Expenditure incurred before the new rules took effect could still qualify for relief under the revised provisions, subject to specific transitional adjustments.
Safeguard oil allowances and other reliefs already claimed or in progress at the time of the changeover were preserved, preventing taxpayers from losing entitlements mid-claim.
Where claims had already been determined under the old rules, the transitional provisions prevented double counting by adjusting allowable amounts to reflect what had already been given.
The Finance Act 2009 subsequently amended these transitional rules to ensure they remained consistent with later changes to PRT administration and assessment procedures.

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