Oil Taxation Act 1975

12A

• (1) This section has effect for the purpose of determining the date on which any oil to which it applies is to be regarded for the purposes of this Part as delivered or relevantly appropriated.

• (2) This section applies to—

• (a) oil (not being light gases) won from a field and disposed of crude by a participator otherwise than in sales at arm's length, and

• (b) oil (not being light gases) so won and relevantly appropriated by a participator,

if the condition in subsection (3)(a) or (b) below is met.

• (3) The condition is that the oil is or has been, or is to be,—

• (a) transported by ship from the place of extraction to a place in the United Kingdom or elsewhere, or

• (b) transported by pipeline to a place in the United Kingdom and loaded on to a ship there.

• (4) The date on which the oil is to be taken to be delivered, or (as the case may be) relevantly appropriated, by the participator is—

• (a) the date of completion of load, in a case where the condition in subsection (3)(a) above is met,

• (b) the date of the bill of lading, in a case where the condition in subsection (3)(b) above is met.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Determination of market value: the notional delivery day for a quantity of oil

1A

• (1) This paragraph has effect for determining, for the purposes of this Schedule, the day which is the “notional delivery day” in the case of any particular quantity of oil of any particular kind whose market value falls to be determined in accordance with the provisions of this Schedule in the case of any chargeable period.

• (2) The notional delivery day need not be a day in the chargeable period.

• (3) In the case of a quantity of oil which, at the end of the chargeable period,—

• (a) has neither been disposed of nor relevantly appropriated in the period, or

• (b) has been disposed of but not delivered in the period,

the notional delivery day is the last business day of the chargeable period.

• (4) In the case of—

• (a) a quantity of oil won and disposed of which is delivered on a day in the chargeable period, or

• (b) a quantity of oil—

• (i) relevantly appropriated on a day in the chargeable period, but

• (ii) not disposed of in the chargeable period,

the notional delivery day is to be determined in accordance with sub-paragraphs (5) to (7) below.

• (5) If that oil is—

• (a) oil transported by ship from the place of extraction to a place in the United Kingdom or elsewhere, or

• (b) oil transported by pipeline to a place in the United Kingdom and loaded on to a ship there,

and there is a loading slot for it (see sub-paragraph (8)), the notional delivery day is the middle day of the loading slot.

• (6) If sub-paragraph (5) above does not apply to that oil, then—

• (a) if it is oil delivered on a day in the chargeable period, the notional delivery day is the date of the delivery, or

• (b) if it is oil relevantly appropriated on a day in the chargeable period, the notional delivery day is the date of the appropriation.

• (7) The Treasury may by regulations make provision for or in connection with substituting as the notional delivery day in such circumstances as may be prescribed—

• (a) in the case of oil transported by ship from the place of extraction to a place in the United Kingdom or elsewhere, the date of completion of load, or

• (b) in the case of oil transported by pipeline to a place in the United Kingdom and loaded on to a ship there, the date of the bill of lading.

• (8) The “loading slot” for any oil is the period of three days within which the loading of the oil on to the ship is or was to take place—

• (a) as duly published by the operator of the facility at which that loading is or was to take place (unless paragraph (b) below applies), or

• (b) as subsequently finally duly varied to give effect to any modifications duly notified to that operator by the participator concerned.

• (9) In sub-paragraph (8) above, “duly” means in accordance with the arrangements for the time being governing the time and manner of—

• (a) publication, or variation, of the final loading schedule for the calendar month in which loading is or was to take place, or

• (b) notification of modifications to that schedule,

and, in any case, before the end of the calendar month immediately preceding that in which loading is to take place.

• (10) If the Treasury consider that, for the purpose of defining “loading slot”, any period of days for the time being specified by or under this Act as the period of days within which loading of oil on to a ship is to take place is, or is to be, no longer appropriate, they may by regulations make provision for, or in connection with,—

• (a) varying the number of days in the period,

• (b) determining the day that is to be the notional delivery day if the number, as varied, is an even number.

The power conferred by this sub-paragraph includes power to make amendments to, or modifications of, this Schedule.

Power to make regulations under this Schedule

12

• (1) Any power to make regulations under this Schedule is exercisable by statutory instrument.

• (2) A statutory instrument containing regulations under this Schedule may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.

• (3) Any power to make regulations under this Schedule includes power—

• (a) to make different provision for different Categories or kinds of oil or for different cases, or

• (b) to make incidental, consequential, supplemental, or transitional provision or savings.

2B

• (1) No amount is to be attributed to a contributing participator under paragraph 2A(2) unless the following conditions are all met.

• (2) The first condition is that the contributing participator is not connected with the defaulter, applying section 1122 of CTA 2010 (connected persons) for the purposes of this sub-paragraph.

• (3) The second condition is that, at the end of the claim period for which the claim is made, the defaulter still has an interest in the relevant oil field which, under paragraph 2(4)(b), falls to be taken into account in determining the shares in the abandonment expenditure.

• (4) The third condition is that the relevant participators have taken all reasonable steps by way of legal remedy—

• (a) to secure that the defaulter meets the whole of the liability referred to in paragraph 2A(1)(a), and

• (b) to enforce any guarantee or other security provided in respect of that liability.

• (5) In sub-paragraph (4) “relevant participators” means—

• (a) each current participator (other than the defaulter), and

• (b) each former participator who makes a default payment in respect of the defaulter's default.

2C

• (1) An amount attributed under paragraph 2A(2) is—

• (a) in the case of a current participator, to be an addition to the share of the abandonment expenditure referable to the current participator's interest in the oil field, or

• (b) in the case of a former participator, to be the share of the abandonment expenditure referable to the former participator's interest in the oil field.

• (2) In paragraphs 2A and 2B and this paragraph—

• “abandonment expenditure” means expenditure which is allowable for an oil field by virtue of section 3(1)(i) or (j);

• “abandonment programme” means an abandonment programme approved under Part 4 of the Petroleum Act 1998 (including any such programme as revised);

• “current participator” means a person who is, by virtue of paragraph (a), (aa), (b) or (c) of the definition in section 12, a participator in the relevant oil field in the chargeable period in which the abandonment expenditure is incurred;

• “former participator” means a person who—is not a current participator, butwas, by virtue of paragraph (a), (aa), (b) or (c) of the definition in section 12, a participator in the relevant oil field in any chargeable period before the chargeable period in which the abandonment expenditure is incurred;

• “relevant agreement” has the meaning given by section 104(5)(a) of the Finance Act 1991;

• “relevant oil field” means the oil field to which the abandonment expenditure relates;

• “sum in default” means the amount of the payment which the defaulter is liable to make as mentioned in paragraph 2A(1)(a), less so much of that payment as has been made by the defaulter

• (3) For the purposes of paragraph 2A, a current participator is to be regarded as defaulting on a liability to make a payment towards abandonment expenditure if the following conditions are met.

• (4) The first condition is that the current participator has failed to make the payment in full on the due day.

• (5) The second condition is that—

• (a) any of the payment remains unpaid on the sixtieth day after the due day, or

• (b) before that sixtieth day, the current participator's interest in a relevant licence becomes liable under the relevant agreement to be sold or forfeited, in whole or in part, by reason of the failure to meet the liability.

• (6) In sub-paragraphs (4) and (5) “due day” means the day on which the payment towards abandonment expenditure becomes due under the relevant agreement or the abandonment programme.

Appeal: HMRC review or determination by tribunal

14A

• (1) This paragraph applies if notice of appeal has been given to HMRC.

• (2) In such a case—

• (a) the participator may notify HMRC that the participator requires HMRC to review the matter in question (see paragraph 14B),

• (b) HMRC may notify the participator of an offer to review the matter in question (see paragraph 14C), or

• (c) the participator may notify the appeal to the tribunal (see paragraph 14D).

• (3) See paragraphs 14G and 14H for provision about notifying appeals to the tribunal after a review has been required by the participator or offered by HMRC.

• (4) This paragraph does not prevent the matter in question from being dealt with in accordance with paragraph 14(9).

Participator requires review by HMRC

14B

• (1) Sub-paragraphs (2) and (3) apply if the participator notifies HMRC that the participator requires HMRC to review the matter in question.

• (2) HMRC must, within the relevant period, notify the participator of HMRC’s view of the matter in question.

• (3) HMRC must review the matter in question in accordance with paragraph 14E.

• (4) The participator may not notify HMRC that the participator requires HMRC to review the matter in question and HMRC shall not be required to conduct a review if—

• (a) the participator has already given a notification under this paragraph in relation to the matter in question,

• (b) HMRC have given a notification under paragraph 14C in relation to the matter in question, or

• (c) the participator has notified the appeal to the tribunal under paragraph 14D.

• (5) In this paragraph “relevant period” means—

• (a) the period of 30 days beginning with the day on which HMRC receive the notification from the participator, or

• (b) such longer period as is reasonable.

HMRC offer review

14C

• (1) Sub-paragraphs (2) to (5) apply if HMRC notify the participator of an offer to review the matter in question.

• (2) When HMRC notify the participator of the offer, HMRC must also notify the participator of HMRC’s view of the matter in question.

• (3) If, within the acceptance period, the participator notifies HMRC of acceptance of the offer, HMRC must review the matter in question in accordance with paragraph 14E.

• (4) If the participator does not give HMRC such a notification within the acceptance period, HMRC’s view of the matter in question is to be treated as if it were contained in an agreement in writing under paragraph 14(9) for the settlement of that matter.

• (5) Sub-paragraph (4) does not apply to the matter in question if, or to the extent that, the participator notifies the appeal to the tribunal under paragraph 14H.

• (6) HMRC may not notify the participator of an offer to review the matter in question (and, accordingly, HMRC shall not be required to conduct a review) if—

• (a) HMRC have already given a notification under this paragraph in relation to the matter in question,

• (b) the participator has given a notification under paragraph 14B in relation to the matter in question, or

• (c) the participator has notified the appeal to the tribunal under paragraph 14D.

• (7) In this paragraph “acceptance period” means the period of 30 days beginning with the date of the document by which HMRC notify the participator of the offer to review the matter in question.

Notifying appeal to the tribunal

14D

• (1) This paragraph applies if notice of appeal has been given to HMRC.

• (2) The participator may notify the appeal to the tribunal.

• (3) If the participator notifies the appeal to the tribunal, the tribunal is to decide the matter in question.

• (4) Sub-paragraphs (2) and (3) do not apply in a case where—

• (a) HMRC have given a notification of their view of the matter in question under paragraph 14B, or

• (b) HMRC have given a notification under paragraph 14C in relation to the matter in question.

• (5) In a case falling within sub-paragraph (4)(a) or (b), the participator may notify the appeal to the tribunal, but only if permitted to do so by paragraph 14G or 14H.

Nature of review etc

14E

• (1) This paragraph applies if HMRC are required by paragraph 14B or 14C to review the matter in question.

• (2) The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances.

• (3) For the purpose of sub-paragraph (2), HMRC must, in particular, have regard to steps taken before the beginning of the review—

• (a) by HMRC in deciding the matter in question, and

• (b) by any person in seeking to resolve disagreement about the matter in question.

• (4) The review must take account of any representations made by the participator at a stage which gives HMRC a reasonable opportunity to consider them.

• (5) The review may conclude that HMRC’s view of the matter in question is to be—

• (a) upheld,

• (b) varied, or

• (c) cancelled.

• (6) HMRC must notify the participator of the conclusions of the review and their reasoning within—

• (a) the period of 45 days beginning with the relevant day, or

• (b) such other period as may be agreed.

• (7) In sub-paragraph (6) “relevant day” means—

• (a) in a case where the participator required the review, the day when HMRC notified the participator of HMRC’s view of the matter in question,

• (b) in a case where HMRC offered the review, the day when HMRC received notification of the participator’s acceptance of the offer.

• (8) Where HMRC are required to undertake a review but do not give notice of the conclusions within the time period specified in sub-paragraph (6), the review is to be treated as having concluded that HMRC’s view of the matter in question (see paragraphs 14B(2) and 14C(2)) is upheld.

• (9) If sub-paragraph (8) applies, HMRC must notify the participator of the conclusion which the review is treated as having reached.

Effect of conclusions of review

14F

• (1) This paragraph applies if HMRC give notice of the conclusions of a review (see paragraph 14E(6) and (9)).

• (2) The conclusions are to be treated as if they were an agreement in writing under paragraph 14(9) for the settlement of the matter in question.

• (3) Sub-paragraph (2) does not apply to the matter in question if, or to the extent that, the participator notifies the appeal to the tribunal under paragraph 14G.

Notifying appeal to tribunal after review concluded

14G

• (1) This paragraph applies if—

• (a) HMRC have given notice of the conclusions of a review in accordance with paragraph 14E, or

• (b) the period specified in paragraph 14E(6) has ended and HMRC have not given notice of the conclusions of the review.

• (2) The participator may notify the appeal to the tribunal within the post-review period.

• (3) If the post-review period has ended, the participator may notify the appeal to the tribunal only if the tribunal gives permission.

• (4) If the participator notifies the appeal to the tribunal, the tribunal is to determine the matter in question.

• (5) In this paragraph “post-review period” means—

• (a) in a case falling within sub-paragraph (1)(a), the period of 30 days beginning with the date of the document in which HMRC give notice of the conclusions of the review in accordance with paragraph 14E(6), or

• (b) in a case falling within sub-paragraph (1)(b), the period that—

• (i) begins with the day following the last day of the period specified in paragraph 14E(6), and

• (ii) ends 30 days after the date of the document in which HMRC give notice of the conclusion of the review in accordance with paragraph 14E(9).

Notifying appeal to tribunal after review offered but not accepted

14H

• (1) This paragraph applies if—

• (a) HMRC have offered to review the matter in question (see paragraph 14C), and

• (b) the participator has not accepted the offer.

• (2) The participator may notify the appeal to the tribunal within the acceptance period.

• (3) But if the acceptance period has ended, the participator may notify the appeal to the tribunal only if the tribunal gives permission.

• (4) If the participator notifies the appeal to the tribunal, the tribunal is to determine the matter in question.

• (5) In this paragraph “acceptance period” has the same meaning as in paragraph 14C.

Interpretation of paragraphs 14A to 14H

14I

• (1) In paragraphs 14A to 14H—

• (a) “matter in question” means the matter to which an appeal relates;

• (b) a reference to a notification is a reference to a notification in writing.

• (2) In paragraphs 14A to 14H, a reference to the participator includes a person acting on behalf of the participator except in relation to—

• (a) notification of HMRC’s view under paragraph 14B(2);

• (b) notification by HMRC of an offer of review (and of their view of the matter) under paragraph 14C;

• (c) notification of the conclusions of a review under paragraph 14E(6); and

• (d) notification of the conclusions of a review under paragraph 14E(9).

• (3) But if a notification falling within sub-paragraph (2) is given to the participator, a copy of the notification may also be given to a person acting on behalf of the participator.

10

In this Schedule “tribunal” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal.

Date of delivery or appropriation: shipped oil not sold at arm's length

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Areas that are oil fields

Areas treated as continuing to be oil fields

6

• (1) This paragraph applies if an area has ceased to be—

• (a) an oil field within the meaning of paragraph 1(1), or

• (b) part of such an oil field.

• (2) The area is to be treated as continuing to be—

• (a) the oil field, or

• (b) the part of the oil field,

that it actually was.

• (3) Accordingly, whilst the area is treated in accordance with sub-paragraph (2), any reference to an oil field is to include a reference to the area.

• (4) Sub-paragraph (2) ceases to apply to the area—

• (a) in accordance with sub-paragraph (5), and

• (b) if or to the extent that it has not ceased to apply in accordance with sub-paragraph (5), in accordance with sub-paragraph (6).

• (5) Sub-paragraph (2) ceases to apply to the area if, or to the extent that, it again becomes—

• (a) an oil field within the meaning of paragraph 1(1), or

• (b) part of such an oil field.

• (6) Sub-paragraph (2) ceases to apply to the area at the end of the second chargeable period that falls after the chargeable period in which the area is decommissioned.

7

• (1) A relevant area is decommissioned for the purposes of paragraph 6 if all qualifying assets of the relevant area are decommissioned.

• (2) If, and to the extent that, a UK offshore decommissioning regime applies to qualifying assets of the relevant area, those assets are decommissioned if—

• (a) the Secretary of State has approved one or more abandonment programmes under the regime in relation to those assets, and

• (b) those programmes have been carried out to the satisfaction of the Secretary of State.

• (3) If, and to the extent that, a UK offshore decommissioning regime does not apply to qualifying assets of the relevant area, those assets are decommissioned if the Board are satisfied that they have been decommissioned.

• (4) For the purposes of sub-paragraph (3) the Board must have regard to any obligations to decommission the qualifying assets which arise under the law applicable to those qualifying assets (whether the law of any part of the United Kingdom or of any other state or territory), including any obligations imposed by an authority having functions under that law in respect of such decommissioning.

• (5) If sub-paragraph (3) applies (to any extent) to any qualifying assets, the Board must give the responsible person notice of any decision the Board make under that sub-paragraph.

• (6) The responsible person may appeal against such a decision by notice in writing given to the Board within three months of the responsible person receiving the notice under sub-paragraph (5).

• (7) An appeal under sub-paragraph (6) may, before it is notified to the tribunal, be abandoned by notice in writing given to the Board by the responsible person.

• (8) The provisions of paragraphs 14A to 14I of Schedule 2 apply to appeals under sub-paragraph (6) subject to any necessary modifications.

• (9) In this paragraph—

• “qualifying assets” means assets that are qualifying assets within the meaning of OTA 1983;

• “relevant area” means an area that is treated as being an oil field, or part of an oil field, under paragraph 6;

• “UK offshore decommissioning regime” means—Part 4 of the Petroleum Act 1998, andPart 1 of the Petroleum Act 1987.

Oil allowance.

12B