Oil Taxation Act 1983 section 8

Qualifying assets

Section 8 defines what counts as a "qualifying asset" for purposes of the oil taxation regime, sets out which assets are excluded, and explains how a qualifying asset is attributed to a particular oil field (the "chargeable field").

• A qualifying asset is an asset (either non-mobile, or a mobile asset dedicated to the field) on which the participator has incurred allowable expenditure for that oil field, provided the asset is not land, an interest in land, or certain onshore buildings and structures.
• Where the only qualifying expenditure was allowed under general expenditure relief provisions, the asset only qualifies if, at the time the expenditure was incurred, the asset was expected to have a useful life extending beyond the claim period in which it was first used in connection with the field.
• Tariff receipts and disposal receipts from a qualifying asset are attributed to a single oil field — generally the field for which the development decision was made earliest — with special tie-breaking rules where development decisions for two or more fields were made on the same day.
• An asset that qualifies solely because it is an "associated asset" (used alongside another qualifying asset) is attributed to whichever field that other principal asset would be attributed to, and the field to which the asset's receipts are attributed is known as the "chargeable field".

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