Finance Act 1987

(15A) (1) In relation to settled property to which this paragraph applies, the provisions of this Part of this Schedule shall have effect with the modifications set out in the following sub-paragraphs. (2) This paragraph applies to property which become property to which paragraph 8 above applies on the occasion of a transfer of value which was made by a person beneficially entitled to an interest in possession in the property, and which (so far as the value transferred by it was attributable to the property)— (a) was an exempt transfer by virtue of the combined effect of either— (i) sections 27 and 57(5) of this Act, or (ii) sections 27 and 57A of this Act, and (b) would but for those sections have been a chargeable transfer; and in the following sub-paragraphs “the person entitled to the interest in possession” means the person above referred to. (3) Paragraph 9(2) shall have effect as if for the reference to the settlor there were substituted a reference to either the settlor or the person entitled to the interest in possession. (4) Paragraph 10 shall not apply if the person entitled to the interest in possession had died at or before the time when the property become property to which paragraph 8 above applies; and in any other case shall have effect with the substitution in sub-paragraph (1) of the following words for the words from “on becoming”— (a) on becoming property to which the person entitled to the interest in possession is beneficially entitled, or (b) on becoming— (i) property to which that person’s spouse is beneficilly entitled, or (ii) property to which that person’s widow or widower is beneficially entitled if that person has died in the two years preceding the time when it becomes such property; but paragraph (b) above applies only where the spouse, widow or widower would have become beneficially entitled to the property on the termination of the interest in possession had the property not then become property to which paragraph 8 above applies. (5) Paragraph 11 shall not apply. (6) Sub-paragraphs (1) to (3) of paragraph 14 shall have effect as if for the references to the settlor there were substituted references to the person entitled to the interest in possession. (7) Sub-paragraph (4) of paragraph 14 shall have effect with the insertion after paragraph (b) of the words “and(c) was, in relation to either of those settlements, property to which paragraph 15A below applied,”, and with the substitution for the words from “settlor shall” onwards of the words “person entitled to the interest in possession shall, if the Board so determine, be construed as references to the person who was the settlor in relation to the current settlement.”. (8) Sub-paragraph (5) of paragraph 14 shall have effect with the insertion after paragraph (b) of the words “and (c) was, in relation to any of those settlements, property to which paragraph 15A below applied,”, and with the substitution for the words from “settlor shall” onwards of the words “person entitled to the interest in possession shall, if the Board so determine,be construed as references to any person selected by them who was the settlor in relation to any of the previous settlements or the current settlement.” (9) Except in a case where the Board have made a determination under sub-paragraph (4) or (5) of paragraph 14, sub-paragraphs (6) and (7) of that paragraph shall have effect as if for the references to the settlor there were substituted references to the person entitled to the interest in possession. (10) Sub-paragraph (9) of paragraph 14 shall have effect with the substitution for the words “(if the settlement was made on death)” of the words “ (if the person entitled to the interest in possession had died at or before the time when the property became property to which paragraph 8 applies) ”.

4

Paragraph 1 above shall have effect in relation to deaths occurring on or after 17th March 1987.

5

Paragraph 2 above shall have effect in relation to directions given on or after 17th March 1987.

6

Paragraph 3 above shall have effect where the occasion of the charge or potential charge to tax under paragraph 8 of Schedule 4 to the 1984 Act falls on or after 17th March 1987.

SCHEDULE 10

Interpretation

1

• (1) In this Schedule—

• “month” means calendar month;

• “nominal volume” shall be construed in accordance with paragraph 7 below;

• “nominated price” shall be construed in accordance with paragraph 6 below;

• “nominated” means a nomination made in such manner as may be prescribed by regulations made by the Board;

• “proposed sale” ... shall be construed in accordance with paragraph (a) of sub-paragraph (1) of paragraph 2 below;

• “proposed delivery month” shall be construed in accordance with paragraph 12A below;

• “proposed transaction” means one falling within paragraph 2(1) below;

• “regulations made by the Board” means regulations under section 61(8) of this Act; and

• “Treasury regulations” means regulations under 61(7) of this Act.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) Where an amount of oil is required to be delivered to the OGA pursuant to a notice served by it, any oil which is inadvertently delivered to him in excess of the amount required shall be treated for the purposes of sub-paragraph (2) above as delivered pursuant to the notice.

Transactions which may be nominated

2

• (1) The proposed transactions which may be nominated by a participator in an oil field for the purposes of this Schedule are—

• (a) proposed sales at arms’s length by the participator of specified quantities of oil for delivery from that oil field; and

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

....

• (2) Where a proposed sale is nominated before a contract of sale comes into being, any reference in this Schedule to the contract of sale is a reference to the subsequent contract for the sale of oil in accordance with the terms of the nomination; and, accordingly, if no such contract of sale comes into being, the nomination of the proposed sale shall be of no effect.

• (3) A particpator may not nominate a proposed sale if—

• (a) under the terms of the contract of sale as orginally entered into, the party undertaking to sell the oil is someone other than the participator; or

• (b) it is of a description prescibed for the purposes of this sub-paragraph by regulations made by the board.

Period for which nomination has effect

3

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Timing of nominations

4

• (1) If a nomination is made during business hours it shall be effective only if—

• (a) it is made within the period of two hours beginning with the transaction base time, and

• (b) it satisfies the requirements of paragraph 5.

• (1A) If a nomination is made outside business hours it shall be effective only if—

• (a) it is made within the period of two hours beginning with the transaction base time, and

• (b) it satisfies the requirements of paragraph 5 or 5A.

• (1B) For the purposes of this paragraph—

• (a) the transaction base time of a proposed transaction is such time on such date as the Board shall prescribe by regulations, and

• (b) “ business hours ” means the period beginning with 09.00 and ending with 17.00 ( UK time) on a business day (within the meaning of the Bills of Exchange Act 1882 (c. 61)).

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) The transaction base time prescribed for a proposed sale may be a time earlier than the time on which a legally binding agreement for the sale of the oil in question comes into being but may not be later than the time on which there is an agreed price at which any oil which is to be delivered pursuant to the contract of sale will be sold.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Content of nomination

5

• (1) The requirements of this paragraph for a nomination in respect of a proposed transaction are,—

• (a) the name of the participator;

• (b) ..., the name of the person to whom the oil is to be sold;

• (c) the field from which the oil is to be delivered ...;

• (d) the nominated price of the oil to be delivered ...;

• (e) the nominal volume of that oil;

• (f) the proposed delivery month;

• (g) the transaction base time; and

• (h) such other information as may be prescribed by the Board.

• (2) A nomination made under this paragraph shall include a declaration that it is correct and complete and, in the case of a nomination of a proposed sale which is made before the contract of sale comes into being, shall also include a declaration that, to the best of the knowledge and belief of the participator making the nomination, a contract of sale will come into being in accordance with the terms of the nomination.

• (3) Where a participator fraudently or negligently furnishes any incorrect information or makes any incorrect declaration in or in connection with a nomination made under this paragraph he shall be liable to a penalty not exceeding £50,000 or, in the case of fraud, £100,000 and the nomination shall not be effective.

Nominated price

6

• (1) ... in the case of a proposed sale, the “nominated price”, in relation to the oil which is to be delivered pursuant to the sale, is the price specified in the contract of sale (expressed as a unit price) or, as the case may be, the formula under which, in accordance with the contract, the price for that oil (as so expressed) is to be determined.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nominal volume

7

• (1) Subject to sub-paragraph (3) below, in the case of a proposed sale, the nominal volume means the quantity of oil which it is proposed should be delivered under the contract of sale in the proposed delivery month.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) In the case of any proposed transaction, the nominal volume means the quantity of oil expressed in such manner as may be prescribed by regulations made by the Board.

• (4) In any case where—

• (a) apart from this sub-paragraph, the nominal volume in any proposed transaction would be expressed as a specific volume of oil, plus or minus a particular tolerance, and

• (b) that tolerance exceeds the limits prescribed for the purposes of this Schedule by regulations made by the Board,

the nominal volume shall for those purposes be taken to be the specific volume referred to in paragraph (a) above, plus or minus the maximum tolerance permitted by the regulations.

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) The Board may by regulations prescribe that in specified circumstances the nominal volume in relation to a delivery shall be treated as greater or less than the nominal volume ascertained in accordance with the preceding provisions of this paragraph.

• (7) Regulations under sub-paragraph (6)—

• (a) shall be made by statutory instrument, and

• (b) may not be made unless a draft has been laid before and approved by resolution of the House of Commons.

Revision of nominations

8

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Effective volume for nominated transactions

9

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Aggregate effective volume for a month

10

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Aggregate nominated proceeds for a month

11

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Blended oil

12

• (1) If a person is a participator in two or more oil fields which, in relation to any blended oil, are or are included among the originating fields, then, in accordance with regulations made by the Board, he may make a nomination, having effect with respect to all the originating fields in which he is a participator, of a proposed sale ... of the blended oil; and the preceding provisions of this Schedule shall have effect in relation to such a nomination subject to such modifications as may be prescribed by regulations made by the Board.

• (2) In sub-paragraph (1) above “ blended oil ” and “ the originating fields ” have the same meaning as in section 63 of this Act.

Returns

13

In paragraph 2 of Schedule 2 to the principal Act (returns by participators) at the end of sub-paragraph (3) there shall be inserted the following sub-paragraph—

(3A) A return under this paragraph for a chargeable period shall— (a) state the amount (if any) which, in the case of the participator, is to be brought into account for that period in accordance with section 2(5)(e) of this Act; (b) contain such particulars as the Board may prescribe (whether before or after the passing of the Finance Act 1987) with respect to any nominated transaction under Schedule 10 to that Act— (i) the effective volume of which forms part of the participator’s aggregate effective volume (construing those terms in accordance with that Schedule) for any calendar month comprised in that chargeable period; and (ii) which has not led to deliveries of oil or relevant appropriations of which particulars are included in the return by virtue of sub-paragraph (2) above; and (c) contain such other particulars as the Board may prescribe (as mentioned above) in connection with the application of section 61 of and Schedule 10 to the Finance Act 1987.

SCHEDULE 11

Part I — Amendments of Paragraphs 2, 2a and 3 of Schedule 3 to Principal Act

1

• (1) Paragraph 2 of Schedule 3 (definition of market value of oil) shall be amended in accordance with this paragraph.

• (2) For sub-paragraph (1) there shall be substituted—

(1) The market value of any oil in any calendar month shall be determined for the purposes of this Part of this Act in accordance with this paragraph.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

In paragraph 2A of that Schedule (modifications in the case of oil consisting of gas)—

• (a) in sub-paragraphs (1) and (3) for “(1) and (2)” there shall be substituted “ (1) to (2D) ”;

• (b) in sub-paragraph (2) for “(2)(a)” in each place where it occurs, there shall be substituted “ (2)(d) ”; and

• (c) in sub-paragraph (3) for “(2)(b)” there shall be substituted “ (2)(e) ”.

3

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Part II — Consequential Amendments of Principal Act

4

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5

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6

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7

In Schedule 9 (sales etc. at undervalue or overvalue) in paragraph 6 (determination of arm's length price) for sub-paragraph (2) there shall be substituted—

(2) In this paragraph "calendar month" means a month of the calendar year and "material time", in relation to a calendar month, means noon on the middle day of the month which, in the case of a month containing an even number of days, shall be taken to be the last day of the first half of the month.

SCHEDULE 12

Interpretation

1

• (1) In this Schedule—

• “HMRC” means Her Majesty's Revenue and Customs;

• “method of allocation” means a method for making an allocation of blended oil for the purposes of section 63 that has been selected by the participators in the originating fields (including such a method that has been amended in accordance with this Schedule).

• (2) In this Schedule a reference to a suitable method of allocation is a reference to a method which secures that allocation of blended oil is just and reasonable (for the purposes of the oil taxation legislation).

Method of allocation not suitable

2

• (1) This paragraph applies if it appears to HMRC that—

• (a) a method of allocation that has been used in respect of a chargeable period was not suitable, or

• (b) a method of allocation that is proposed to be used in respect of a chargeable period would not be suitable.

• (2) HMRC may give notice to each of the participators in the originating fields—

• (a) informing the participators of what appears to HMRC to be the case, and

• (b) proposing amendments to the method of allocation.

• (3) If HMRC give notice, the allocation of the blended oil for the purposes of section 63 in respect of the chargeable period is to be redetermined, or determined, using the method of allocation as amended in accordance with the notice.

• (4) Sub-paragraph (3) is subject to—

• (a) the following provisions of this Schedule,

• (b) any subsequent notice given under this paragraph, and

• (c) any amendment to the method of allocation made by the participators in the originating fields.

Appeals

3

• (1) Where HMRC give notice to the participators in the originating fields under paragraph 2(2) above, any of those participators may appeal ... against the notice by giving notice in writing to HMRC within thirty days after the date of the notice given by HMRC.

• (2) Where notice of appeal is given under sub-paragraph (1) above—

• (a) HMRC shall give notice in writing to all those participators in the originating fields who have not given notice of appeal and they shall, by virtue of that notice, become parties to the appeal ....

• (b) if, before the determination of the appeal by the tribunal, HMRC and the participators in the originating fields agree that the method of allocation concerned should not be amended or should have effect with particular amendments, the same consequences shall ensue as if the tribunal had determined the appeal to that effect;

• (c) if, on an appeal notified to the tribunal, it appears to the tribunal that the method of allocation concerned is satisfactory, with or without modifications, for the purposes of the oil taxation legislation the tribunal shall allow the appeal and, where appropriate, shall amend the method of allocation accordingly for those purposes; and

• (d) paragraphs 14(2), (8) and (11) and 14A to 14I of Schedule 2 to the principal Act shall apply in relation to the appeal as they apply in relation to an appeal against an assessment or determination made under that Act subject to the following modifications—

• (i) any reference to an agreement under paragraph 14(9) shall be construed as a reference to an agreement under sub-paragraph (2)(b) above;

• (ii) any other modifications that are necessary.

• (3) If the method of allocation is amended in accordance with this paragraph, the allocation of the blended oil for the purposes of section 63 in respect of the chargeable period is to be redetermined, or determined, using the method of allocation as so amended.

• (4) Sub-paragraph (3) is subject to—

• (a) any subsequent notice given under this paragraph, and

• (b) any amendment to the method of allocation made by the participators in the originating fields.

4

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SCHEDULE 13

Part I — Section to be Inserted After Section 5A of the Principal Act

Part II — Amendments Relating to the New Allowance

The principal Act

1

In section 2(9) of the principal Act (amounts to be taken into account in respect of expenditure) at the end of paragraph (f) there shall be added

and (g) any research expenditure allowable in the case of the participator under section 5B of this Act which, on a claim made by him under Schedule 7 to this Act, has been allowed under that Schedule before the Board have made an assessment to tax or a determination on or in relation to him for the period in respect of the field, so far as that expenditure has not been taken into account in any previous assessment to tax or determination.

2

In section 3 of that Act, in subsection (3) (expenditure not allowable under that section if already allowed under other provisions) after the words “section 5A” there should be inserted “ or section 5B ”.

3

In section 9 of that Act (limit on amount of tax payable) in subsection (2)(a)(ii) for the words “and (f)” there shall be inserted “ (f) and (g) ”.

4

In paragraph 2 of Schedule 2 to that Act (returns by participators) in sub-paragraph (2A) (initial return to include particulars of certain expenditure already claimed) for the words “exploration and appraisal expenditure to which section 5A” there shall be substituted “ expenditure to which section 5A or section 5B ”.

5

• (1) In Schedule 7 to that Act (claim for allowance of certain exploration expenditure etc.) at the end of paragraph 1(1)(b) there shall be added

or (c) of any research expenditure allowable under section 5B of this Act

.

• (2) In paragraph 1(3) of that Schedule after the words “section 5A” there shall be inserted “ or section 5B ”.

The Petroleum Revenue Tax Act 1980

6

In the Schedule to the Petroleum Revenue Tax Act 1980 (computation of payment on account) in paragraph 2(4) for the words “or (f)” there shall be substituted “ (f) or (g) ”.

The Finance Act 1980

7

In Schedule 17 to the Finance Act 1980 (transfers of interests in oil fields) after paragraph 16A (exploration and appraisal expenditure) there shall be inserted—

(16B) In relation to research expenditure to which section 5B applies, paragraph 16 above has effect as if any reference therein to section 5 were a reference to section 5B.

The Finance Act 1981

8

In section 111 of the Finance Act 1981 (restriction of expenditure supplement) in subsection (3)(a) the words following “the principal Act” (which specify certain types of expenditure and losses) shall be omitted.

The Finance Act 1984

9

• (1) In section 113 of the Finance Act 1984 (restriction on PRT reliefs), in subsection (1)—

• (a) the words “abortive exploration expenditure or exploration and appraisal” shall be omitted; and

• (b) after the words “section 5A” there shall be inserted “ or section 5B ”.

• (2) In subsection (6) of that section—

• (a) after the words “section 5A” there shall be inserted “ or section 5B ”; and

• (b) for the words “paragraph 16 or paragraph 16A” there shall be substituted “ paragraphs 16 to 16B ”.

Part III — Receipts to be Set Against Allowable Expenditure

10

In this Part of this Schedule—

• “allowable expenditure” means expenditure which, in accordance with section 5B of the principal Act, is allowable on a claim made by a participator under Schedule 7 to that Act; and

• “qualifying receipt” means a sum the amount of which falls, by virtue of subsection (6) of section 5 of the principal Act, to be applied by way of reduction in the amount of expenditure which would otherwise be allowable expenditure.

11

• (1) A return made by a participator for a chargeable period under paragraph 2 of Schedule 2 to the principal Act shall give details of any qualifying receipt (whether received by him or by a person connected with him) of which details have not been given in a return made by him for an earlier chargeable period.

• (2) Section 1122 of the Corporation Tax Act 2010 (connected persons) applies for the purposes of this paragraph.

12

• (1) This paragraph applies where—

• (a) a claim for allowable expenditure has been made by a participator under Schedule 7 to the principal Act; and

• (b) as a result of the receipt (whether before or after the making of the claim) of a qualifying receipt, the amount allowed by way of allowable expenditure on the claim exceeds what it should have been.

• (2) In determining, in a case where this paragraph applies, the assessable profit or allowable loss accruing to the participator in the chargeable period in which the qualifying receipt is recived, the amount of the excess referred to in sub-paragraph (1)(b) above shall be taken into account under section 2 of the principal Act as an amount which is to be included among the positive amounts referred to in subsection (3)(a) of that section.

• (3) In the application of section 9 of the principal Act (limit on amount of tax payable) to a chargeable period in respect of which sub-paragraph (2) above applies, the amount of the excess referred to in sub-paragraph (1)(b) above shall be deducted from the amount which would otherwise be the total ascertained under subsection (2)(a)(ii) of that section and, if the amount of that excess is greater than the amount which would otherwise be that total, that total shall be a negative amount equal to the difference.

SCHEDULE 14

Part I — Elections

General

1

• (1) An election shall be made in such form as may be prescribed by the Board.

• (2) Without prejudice to sub-paragraph (1) above, an election shall specify—

• (a) the expenditure in respect of which it is made and the amount of that expenditure (in this Part of this Schedule referred to as “the elected amount”), which shall not exceed 10 per cent., which is to be allowable under the principal section;

• (b) the field of origin and the receiving field;

• (c) the notice, agreement or determination which, under paragraph 2 below, determines the earliest date on which the election could be made;

• (d) in a case where the elected amount is to be allowable in respect of more than one receiving field, the proportions in which that amount is to be apportioned between those fields; and

• (e) in the case of expenditure incurred by a company which is an associated company of the participator for the purposes of the principal section, the name of that company.

• (3) An election shall be irrevocable.

Earliest date for an election

2

• (1) No election may be made in respect of an amount of expenditure until a final decision as to supplement has been made on a claim in respect of that amount under Schedule 5 or Schedule 6 to the principal Act.

• (2) For the purposes of this paragraph, a final decision as to supplement is made in relation to an amount of expenditure when—

• (a) the Board give to the responsible person or, as the case may be, the participator notice under paragraph 3 of Schedule 5 to the principal Act stating that amount of expenditure as an amount qualifying for supplement; or

• (b) after notice of appeal has been given against a decision on a claim, an agreement is made as mentioned in sub-paragraph (1) of paragraph 6 of Schedule 5 to the principal Act and that amount of expenditure is, for the purposes of that sub-paragraph, the appropriate amount of the expenditure claimed as qualifying for supplement; or

• (c) on an appeal against a decision on a claim, there is a determination by the tribunal or the court by virtue of which that amount of expenditure falls (under paragraph 7(2) or paragraph 8(2) of Schedule 5 to the principal Act) to be treated for the purposes of Part I of that Act as qualifying for supplement.

• (3) Nothing in Schedule 5 to the principal Act relating to the date on which an amount of expenditure is to be treated as having been allowed as qualifying for supplement applies for the purposes of sub-paragraph (2) above.

Latest date for election

3

• (1) Subject to sub-paragraph (2) below, an election by a participator in respect of a particular amount of expenditure may be made at any time before—

• (a) the Board make, for a chargeable period of the field of origin, an assessment or determination which takes account of that amount of expenditure as qualifying for supplement; and

• (b) notice of that assessment or determination is given to the participator or, as the case may be, the associated company, under paragraph 10 of Schedule 2 to the principal Act.

• (2) Where the earliest date for the making of an election in respect of a particular amount of expenditure is a date determined under paragraph 2(2)(b) or paragraph 2(2)(c) above, such an election may be made at any time before notice is given as mentioned in sub-paragraph (1)(b) above or, if it is later, before the expiry of the period of thirty days beginning on the day following that earliest date.

Two or more elections relating to same expenditure

4

Where more than one election is made in respect of the same amount of expenditure—

• (a) the maximum of 10 per cent

Part II — Effect on Receiving Field

5

• (1) In relation to an election, the assessment to tax or determination referred to in subsection (4)(a) of the principal section is that which is first made after the relevant date on or in relation to the participator by whom the election is made.

• (2) Subject to paragraphs 6 and 7 below, the relevant date for the purposes of sub-paragraph (1) above is the date of the election.

6

In any case where—

• (a) an election is made in the period of thirty days beginning on the day following that on which the Board give notice under paragraph 3 of Schedule 5 to the principal Act stating the expenditure in respect of which the election is made as expenditure qualifying for supplement, and

• (b) after the date of that notice but on or before the date of the election, an assessment to tax or determination for the receiving field is made on or in relation to the participator making the election,

the relevant date for the purposes of paragraph 5(1) above is the date of the notice referred to in paragraph (a) above; and the assessment or determination referred to in paragraph (b) above shall be amended accordingly.

7

In any case where, following the giving of a notice of appeal, an election is made in respect of expenditure which (under paragraph 6(1), paragraph 7(2) or paragraph 8(2) of Schedule 5 to the principal Act) is treated for the purposes of Part I of that Act as having been allowed as qualifying for supplement on the date on which the notice of appeal was given, the relevant date for the purposes of paragraph 5(1) above is the date on which that notice was given; and in any assessment to tax or determination (relating to the field of origin or the receiving field) all such adjustments or further adjustments shall be made as are necessary in consequence of the election.

Part III — Relevant New Fields and Associated Companies

Relevant new fields

8

• (1) For the purposes of the principal section “relevant new fields” means, subject to sub-paragraph (2) below, an oil field—

• (a) no part of which lies in a landward area, within the meaning of the Petroleum (Production) Regulations 1982 or in an area to the East of the United Kingdom and between latitudes 52° and 55° North; and

• (b) for no part of which consent for development has been granted to the licensee by the Secretary of State before 17th March 1987; and(c) for no part of which a programme of development had been served on the licensee or approved by the Secretary of State before that date.

• (2) In determining, in accordance with sub-paragraph (1) above, whether an oil field (in this sub-paragraph referred to as “the new field”) is a relevant new field, no account shall be taken of a consent for develoment granted before 17th March 1987 or a programme of development served on the licensee or approved by the Secretary of State before that date if—

• (a) in whole or part that consent or programme related to another oil field for which a determination under Schedule 1 to the principal Act was made before the determination under that Schedule for the new field; and

• (b) on or after 17th March 1987 a consent for development is or was granted or a programme of development is or was served on the licensee or approved by the OGA and that consent or programme relates, in whole or in part, to the new field.

9

• (1) In paragraph 8 above “development” means—

• (a) the erection or carrying out of permanent works for the purpose of getting oil from the field or for the purpose of conveying oil won from the field to a place on land; or

• (b) winning oil from the field otherwise than in the course of searching for oil or drilling wells;

and consent for development does not include consent which is limited to the purpose of testing the characteristics of an oil-bearing area and does not relate to the erection or carrying out of permanent works.

• (2) In sub-paragraph (1) above “permanent works” means any structures or other works whatsoever which are intended by the licensee to be permanent and are neither designed to be moved from place to place without major dismantling nor intended by the licensee to be used only for searching for oil.

Associated companies

10

• (1) For the purposes of the principal section, a company is an associated company of a participator (being itself a company) making an election under that section if—

• (a) throughout that part of the relevant period in which both were in existence one was a 51 per cent. subsidary of the other and the other was not a 51 per cent. subsidary of any company; or

• (b) each of them was, throughout that part of the relevant period in which it was in existence, a 51 per cent, subsidary of a third company which was not itself a 51 per cent. subsidiary of any company.

• (2) In this paragraph “company” means any body corporate and Chapter 3 of Part 24 of the Corporation Tax Act 2010 (subsidiaries) applies for the purposes of this paragraph.

• (3) For the purposes of this paragraph the relevant periods ends on the date on which the election in question is made and begins—

• (a) in the case of an election relating to expenditure incurred in the first claim period of the field of origin, on the date on which any part of that field was first determined under Schedule 1 to the principal Act; and

• (b) in the case of an election relating to expenditure incurred in any other claim period of the field of origin, at the beginning of that claim period.

Part IV — Supplemental and Consequential Provisions

Notice of variation reducing expenditure qualifying for supplement

11

• (1) This paragraph applies in any case where—

• (a) an amount of expenditure is allowed as qualifying for supplement as regards the field of origin; and

• (b) one or more elections is made in respect of that expenditure; and

• (c) a notice of variation is served under paragraph 9 of Schedule 5 to the principal Act; and

• (d) on that notice of variation becoming effective for the purposes of the said paragraph 9, the amount of the expenditure referred to in paragraph (a) above is taken for the purposes of Part I of the Principal Act as having been reduced.

• (2) In sub-paragraph (3) below—

• (a) “the original expenditure” means the amount of expenditure referred to in sub-paragraph (1)(a) above, disregarding the effect of the notice of variation;

• (b) “the reduced expenditure” means the amount of expenditure after the notice of variation became effective for the purposes of paragraph 9 of Schedule 5 to the principal Act; and

• (c) “the expenditure originally allowable” means the amount of the original expenditure which, having regard to the election or elections in respect of that expenditure but disregarding the effect of the notice of variation, was allowable in accordance with the principal section.

• (3) If the expenditure originally allowable exceeds 10 per cent. of the reduced expenditure, the principal section shall have effect as if the election or elections had specified an amount of that expenditure equal (or equal in the aggregate) to 10 per cent. of the reduced expenditure and, where there was more than one election, paragraph 4 above shall be taken to have applied accordingly.

• (4) Such amendments of assessments to tax or determinations (relating to the field of origin or the receiving field) shall be made as may be necessary in consequence of the preceding provisions of this paragraph.

Elections following variation increasing expenditure qualifying for supplement

12

• (1) In any case where—

• (a) an amount of expenditure is allowed as qualifying for supplement as regards the field of origin, and

• (b) one or more elections is made in respect of that expenditure, and

• (c) a notice of variation is served under paragraph 9 of Schedule 5 to the principal Act, and

• (d) on that notice of variation becoming effective for the purposes of the said paragraph 9, the amount of the expenditure referred to in paragraph (a) above is taken for the purposes of Part I of the principal Act as having been increased,

an election may be made in respect of the amount of the increase as if it were a separate amount of expenditure.

• (2) In the circumstances referred to in sub-paragraph (1) above an election may be made by the participator in question at any time before—

• (a) notice is given to the participator or, as the case may be, the associated company of the making of that assessment or determination or that amendment of an assessment or determination which takes account of the increase resulting from the notice of variation; or

• (b) if it is later, the expiry of the period of thirty days beginning on the date on which the notice of variation becomes effective for the purposes of paragraph 9 of Schedule 5 to the principal Act.

• (3) Where an election is made by a participator in the circumstances referred to in sub-paragraph (1) above—

• (a) paragraph 1(2)(c) above shall have effect as if it referred to the notice of variation;

• (b) subsection (4)(a) of the principal section shall not apply; and

• (c) the expenditure allowable as a result of the election shall be taken into account in the first assessment to tax or determination relating to a chargeable period of the receiving field which is made on or in relation to the participator after the date of the decision to which the notice of variation relates.

• (4) Such amendments of assessments to tax or determinations (relating to the field of origin or the receiving field) shall be made as may be necessary in consequence of the preceding provisions of this paragraph.

Limit on amount of tax payable in respect of receiving field

13

• (1) Where an election has been made by a participator, this paragraph has effect with respect to the determination under section 9 of the principal Act (limit on amount of tax payable) of the adjusted profit of the participator in respect of the receiving field.

• (2) For the chargeable period in which the amount of expenditure allowable by virtue of the election is taken into account as mentioned in subsection (4) of the principal section, that amount shall also be taken into account as if it were an addition to the total amount mentioned in section 9(2)(a)(ii) of the principal Act.

SCHEDULE 15

The Capital Allowances Act 1968 (c. 3)

1–11

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

The Income and Corporation Taxes Act 1970 (c. 10)

2

• (1) The Income and Corporation Taxes Act 1970 shall have effect subject to the following provisions of this paragraph.

• (2) In section 14(7) for all the words following "the Board may consult" there shall be substituted the words "the Secretary of State or the Department of Education for Northern Ireland".

• (3) In section 18(6) for all the words following "1948" there shall be substituted the words "or, in the case of a person ordinarily resident in Scotland or in Northern Ireland, a person who is a blind person within the meaning of section 64(1) of the National Assistance Act 1948.".

• (4) In section 20 in subsection (1) for "the appropriate rate" there shall be substituted "the basic rate" and subsections (3) to (5) shall cease to have effect.

• (5) In section 21(4)(b) for "has the same meaning as in the said section 20" there shall be substituted "means the basic rate".

• (6) In section 73(3) for "feu" there shall be substituted "fee".

• (7) At the end of section 103 there shall be added—

For the avoidance of doubt it is hereby declared that interest to which section 18 of the Taxes Management Act 1970 applies does not include interest to which this section applies.

• (8) In section 117(3)(i) and (ii) for "legal representatives" there shall be substituted "personal representatives" and in subsection (4) of that section for "executors or administrators" there shall be substituted "personal representatives".

• (9) In section 130(c) for "trade or profession" there shall be substituted "trade, profession or vocation".

• (10) In section 133—

• (a) in subsection (1) the words "for Education and Science" shall cease to have effect; and

• (b) the following shall be substituted for subsection (3)—

(3) In relation to technical colleges or other institutions in Northern Ireland, subsection (1) above shall have effect as if for the reference to the Secretary of State there were substituted a reference to the Department of Education for Northern Ireland.

.

• (11) In section 168(7) after "trade", in both places, there shall be inserted "profession or vocation" and after "Case I" there shall be inserted "or II".

• (12) In section 194(1) for "This section" there shall be substituted "Subsection (2) below".

• (13) At the end of sections 213(1), 216(2) and 217(2) there shall be added—"A claim for relief under this subsection shall be made to the Board."

• (14) In section 214(6) for all the words following "do not include" there shall be substituted the words "Australia, Canada, New Zealand, India, Sri Lanka and Cyprus".

• (15) In section 433—

• (a) in paragraph (a) after "payable" there shall be inserted "prior rights of surviving spouse on intestacy"; and

• (b) in paragraph (d) after "in respect of there shall be inserted "prior rights by surviving spouse or in respect of.

• (16) In section 434 for subsection (1A) there shall be substituted the following—

(1A) Subsection (1) above shall not apply in relation to income which is payable as a covenanted payment to charity.

.

• (17) In section 438(2)(b) for "that section" substitute "section 437 above".

• (18) In section 503 (1) the reference to corporation tax shall cease to have effect and accordingly section 100(1) of the Finance Act 1972 shall cease to apply to that subsection.

• (19) In section 516(1) for "country" there shall be substituted "territory".

• (20) Section 526 shall have effect and shall be deemed always to have had effect with the addition, at the end of subsection (5), of the words—

and 'industrial assurance business' means industrial assurance business within the meaning of the Industrial Assurance Act 1923 or the Industrial Assurance (Northern Ireland) Order 1979.

• (21) In section 526 the following subsection shall be inserted after subsection (5)

(5A) In the Tax Acts any reference to a child, however expressed, shall be construed as including a reference to an adopted child. This subsection does not apply for the purposes of paragraph 18 of Schedule 14 to this Act.

• (22) In paragraph 16(1) of Schedule 10 for the definition of "premiums trust fund" there shall be substituted the following—

• 'premiums trust fund' means such a trust fund as is referred to in section 83 of the Insurance Companies Act 1982;

• (23) In paragraph 6 of Part III of Schedule 12 there shall be added at the end—

(5) This paragraph shall apply to— (a) any banker or other person in the United Kingdom who obtains payment of any such interest, dividends or other annual payments as is or are mentioned in sub-paragraph (1) above; and (b) to any person who would, apart from this paragraph, be obliged to pay income tax in respect of the proceeds of the sale or other realisation of any coupon for any such interest, dividends or other annual payments, as it applies to any person entrusted with the payment of any such interest, dividends or other annual payments, with the substitution in a case falling within paragraph (b) above, of references to the proceeds of the sale or other realisation for references to such interest, dividends or other annual payments. In this sub-paragraph 'coupon' has the same meaning as in section 159 of this Act.

The Finance Act 1970 (c. 24)

3

In section 20(3) of the Finance Act 1970 for "an existing scheme" there shall be substituted "a scheme which was in existence on 6th April 1980".

The Finance Act 1972 (c. 41)

4

In paragraph 10(9) of Schedule 16 to the Finance Act 1972—

• (a) for "paragraphs (b) and (c)" there shall be substituted "paragraph (b)";

• (b) the paragraph lettered (c) shall become paragraph (bb); and

• (c) at the end there shall be added the words—

and in paragraph (c) for 'thirdly' there shall be substituted 'fourthly' and for '(a) or (b)' there shall be substituted '(a), (b) or (bb)'

.

The Finance Act 1973 (c. 51)

5

In paragraph 1(6)(b) of Schedule 12 to the Finance Act 1973 for the words from "any of" to "partnership)" there shall be substituted—

(i) a first-year allowance within the meaning of Chapter I of Part III of the Finance Act 1971 ("the 1971 Act") in respect of expenditure incurred by the company on the provision of machinery or plant; (ii) a writing-down allowance within the meaning of Chapter II of Part I of the Capital Allowances Act 1968 ("the 1968 Act") or, as the case may require, Chapter I of Part III of the 1971 Act in respect of expenditure incurred by the company on the provision of machinery or plant; or (iii) an allowance under section 91 of the 1968 Act in respect of expenditure incurred by the company on scientific research;

.

The Finance Act 1974 (c. 30)

6

In section 27(5) of the Finance Act 1974 for "specified in" there shall be substituted "of.

The Finance Act 1975 (c. 7)

7

• (1) In section 12 of the Finance Act 1975 for the words from "in section" to "1958" there shall be substituted "below" and at the end of that section there shall be added—

• In this section "statutory corporation" means— a corporation incorporated by an Act of Parliament of the United Kingdom or the Parliament of Northern Ireland or by a Measure of the Northern Ireland Assembly or by an Order made under paragraph 1 of Schedule 1 to the Northern Ireland Act 1974; or any other corporation, being a corporation to which functions in respect of the carrying on of an undertaking are entrusted by such an Act, Measure or Order, or by an order made under or confirmed by such an Act or Measure; but, save as is provided by paragraph (b) above, does not include any company within the meaning of the Companies Act 1985 or the Companies (Northern Ireland) Order 1986.

• (2) It is hereby declared for the avoidance of doubt that the reference in paragraph 1(4) of Schedule 2 to the Finance Act 1975 to paragraph 3 of Schedule 1 to the 1970 Act includes a reference both to paragraph 3 of that Schedule as enacted and to paragraphs 3 and 3A of that Schedule as substituted by Part I of Schedule 10 to the Finance Act 1985.

The Finance (No. 2) Act 1975 (c.45)

8

• (1) In section 42(11) of the Finance (No.2) Act 1975 for the definitions of "financial year", "insurance company" and "long term business" there shall be substituted the following definitions—

• "financial year" has the meaning given by section 96 of the Insurance Companies Act 1982;
• "insurance company" means an insurance company to which Part II of that Act applies;
• "long term business" has the meaning given by section 1(1) of that Act.

• (2) In paragraph 6(1) of Part IV of Schedule 12 to that Act (as amended by Schedule 2 to the Companies Consolidation (Consequential Provisions) Act 1985) before sub-paragraph (a) there shall be inserted the following sub-paragraph—

(aa) sections 227 and 241 (contents, laying and delivery of annual accounts;

The Finance Act 1976 (c. 40)

9

In paragraph 13(4) of Schedule 4 to the Finance Act 1976 after paragraph (d) there shall be inserted—

(e) section 64 of the Friendly Societies Act 1974;

.

The Finance Act 1977 (c. 36)

10

In section 38(2)(b) of the Finance Act 1977 for "subsection (3)(a)(i) of the said section 84" substitute "paragraph 3(1)(a)(i) of Schedule 4 to the Inheritance Tax Act 1984".

The Finance Act 1978 (c. 42)

11

• (1) Section 30(7)(c) of the Finance Act 1978 shall have effect and shall be deemed always to have had effect with the addition after "1975" of the words "and paragraph 3(1) of Schedule 2 to the Social Security (Northern Ireland) Act 1975".

• (2) For the purposes of section 31 of that Act "commodity futures" has the same meaning as it has for the purposes of section 72(1) of the Finance Act 1985.

• (3) In section 59(7) of that Act for the words "excess shares" there shall be substituted the words "excess or unauthorised shares".

The Interpretation Act 1978 (c. 30)

12

In Schedule 1 to the Interpretation Act 1978 for the definitions of “the Corporation Tax Acts” and “the Tax Acts” there shall be substituted the following definitions—

• “The Corporation Tax Acts” means the enactments relating to the taxation of the income and chargeable gains of companies and of company distributions (including provisions relating to income tax);

• “The Tax Acts” means the Income Tax Acts and the Corporation Tax Acts.

The Finance Act 1980 (c. 48)

13–17

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

The Finance Act 1981 (c. 35)

14

• (1) In section 48(10) of the Finance Act 1981 for the words from "subscription" to "funds" there shall be substituted the words "payment made, out of public funds or by shares subscribed for, whether for money or money's worth,".

• (2) In section 58(8) of that Act after "goods" there shall be inserted "or services".

The Finance Act 1983 (c. 28)

15

• (1) At the end of paragraph 10(4) of Schedule 5 to the Finance Act 1983 there shall be added the words—

In relation to companies incorporated under the law of Northern Ireland references in this sub-paragraph to the Companies Act 1985 and to section 117 of that Act shall have effect as references to the Companies (Northern Ireland) Order 1986 and to Article 127 of that Order respectively.

• (2) In paragraph 17(1A)(b) of that Schedule for "more than" there shall be substituted "not less than".

The Finance Act 1984 (c. 43)

16

• (1) For section 96(6) of the Finance Act 1984 there shall be substituted—

(6) A charity shall be exempt from tax in respect of an offshore income gain if the gain is applicable and applied for charitable purposes; but if property held on charitable trusts ceases to be subject to charitable trusts and that property represents directly or indirectly an offshore income gain, the trustees shall be treated as if they had disposed of and immediately reacquired that property for a consideration equal to its market value, any gain (calculated in accordance with Schedule 20 to this Act) accruing being treated as an offshore income gain not accruing to a charity. In this subsection "charity" has the same meaning as in section 360 of the Taxes Act and "market value" has the same meaning as in the Capital Gains Tax Act 1979.

• (2) For paragraph 2(1)(d) of Schedule 8 to that Act there shall be substituted the following paragraph—

(d) any company to which property and rights belonging to a trustee savings bank were transferred by section 3 of the Trustee Savings Bank Act 1985;

.

• (3) For paragraph 12 of Schedule 9 to that Act there shall be substituted—

(12) A charity shall be exempt from income tax in respect of an amount which (apart from this paragraph) is chargeable to income tax by virtue of this Schedule or Schedule 11 to the Finance Act 1985 if the amount is applicable and applied for charitable purposes. In this paragraph "charity" has the same meaning as in section 360 of the Taxes Act.

The Finance Act 1986 (c. 41)

17

At the end of paragraph 21(3) of Schedule 9 to the Finance Act 1986 there shall be added the words—

and paragraph 20(4) shall have effect in relation to shares whenever issued

.

SCHEDULE 16

Part I — Vehicles Excise Duty

Part II — Betting and Gaming Duties

Part III — Management of Customs and Excise

Part IV — Value Added Tax

Part V — Income Tax and Corporation Tax: General

Part VI — Unit Trusts

Part VII — Income Tax and Corporation Tax: Pre-Consolidation Amendments

Part VIII — Stamp Duty

Part IX — Inheritance Tax

Part X — Oil Taxation

Part XI — Exchange Control

Part 1 — Customs and Excise and Value Added Tax

Chapter I — Customs and Excise

Duties of excise

Part I Vehicles excise duty.

Abolition of general betting duty on on-course bets.

Local export control.

Amendments of the Management Act

Powers of search and access etc. in respect of vehicles. 1979 c. 2.

Local export control.

Information powers.

Chapter II — Value Added Tax

Maintenance funds for historic buildings etc.

Market value of oil to be determined on a monthly basis.

Maintenance funds for historic buildings etc.

Blends of oil from two or more fields.

Market value of oil to be determined on a monthly basis.

Relief for research expenditure.

Regulation of financial dealings.

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

Part I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5A

• (1) The requirements of this paragraph for a nomination in respect of a proposed transaction are—

• (a) the name of the participator or of the group of which the participator is a member;

• (b) the name of the person to whom the oil is to be sold, or the name of the group of which that person is a member;

• (c) the blend or grade of oil to be delivered;

• (d) the nominated price of the oil to be delivered;

• (e) the nominal volume of the oil;

• (f) the proposed delivery month;

• (g) the transaction base time; and

• (h) such other information as may be prescribed by the Board.

• (2) In sub-paragraph (1) “ group ” has the meaning given by section 53 of the Companies Act 1989.

5B

• (1) A nomination of a transaction shall not be effective unless oil is delivered pursuant to a contract at arm's length the terms of which incorporate the information specified in the nomination in accordance with paragraph 5(1) or 5A(1).

• (2) But—

• (a) a contract need not refer to the transaction base time, and

• (b) the nomination shall be effective whether or not delivery takes place in the proposed delivery month specified in the nomination and the contract.

Interpretation

12A

For the purposes of section 61 and this Schedule—

• (a) a reference to the proposed delivery month in relation to a proposed transaction is a reference to the month in which delivery is to take place,

• (b) “ relevant delivery ” means a delivery of oil under a contract made at arm's length in respect of which there has been no effective nomination, and

• (c) “ delivery proceeds ” means the price received for a relevant delivery.

1

The repeals in section 16 of each of the Vehicles (Excise) Act 1971 and the Vehicles (Excise) Act (Northern Ireland) Act 1972 have effect in relation to licences taken out after 31st December 1987.

2

The remaining repeals have effect in accordance with section 2(8) (a) and (b) of this Act.

1

The repeal in section 1 of the Betting and Gaming Duties Act 1981 and the repeal of section 3 of that Act have effect with respect to bets made on or after 29th March 1987.

2

The repeal in the Finance Act 1982 has effect with respect to gaming machine licences for any period beginning on or after 1st June 1987.

3

The remaining repeals have effect with respect to gaming machine licences for any period beginning on or after 1st October 1987.

1

The repeals in section 86 of the Taxes Management Act 1970, sections 243 and 244 of the Income and Corporation Taxes Act 1970 and sections 44 and 48 of the Finance (No. 2) Act 1975 have effect with respect to accounting periods beginning on or after 17th March 1987.

2

Subject to section 37(2) of this Act, the repeals in section 303 of the Income and Corporation Taxes Act shall be deemed to have come into force on 6th April 1986.

3

The repeals in Schedule 9 to the Finance Act 1978, section 46 of and Schedule 10 to the Finance Act 1980 and Schedule 10 to the Finance Act 1984 shall be deemed to have come into force on 6th April 1986.

4

The repeals of section 27 of the Finance Act 1981 and section 32 of the Finance Act 1982 do not apply in relation to payments of supplementary allowance in respect of periods before the day on which regulations containing the first schemes under section 20(1)(a) of the Social Security Act 1986 and Article 21(1)(a) of the Social Security (Northern Ireland) Order 1986 come into force.

1

The repeals in section 30 of the Finance Act 1967 and section 7 of the Finance Act (Northern Ireland) 1967 have effect with respect to the issue of instruments and the transfer of stock on or after the day on which this Act is passed.

2

The remaining repeals shall come into force on the day on which section 49(1) of this Act comes into force.

1

The repeal of the Exchange Control Act 1947 does not affect the power of the Treasury to issue a certificate under subsection (2) of section 18 of that Act (including that subsection as applied by section 28(3) or section 29(3) of that Act) with respect to acts done before 13th December 1979.

2

The repeal of section 150(5) of the Capital Gains Tax Act 1979 does not affect the determination of the market value of any assets at a time before 13th December 1979.

Editorial notes