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Summary of responses to the consultation on Decommissioning Relief Deeds.
The Decommissioning Relief Deed provides certainty for oil and gas companies over the tax relief they will receive when decommissioning assets in the future.
The Government announced a package of measures on oil and gas taxation to support investment. This package includes the introduction of legislation in 2013 giving the Government statutory authority to sign contracts with companies operating in the UK and UK Continental Shelf (UKCS), to provide assurance on the tax relief they will receive when decommissioning assets.
The Government recognises that a perceived lack of certainty over how much decommissioning tax relief companies may be able to claim in future is currently making it difficult for oil and gas assets to change hands, limiting the funds available for new ventures, and deterring incremental investment. The contractual approach that the Government is proposing in this consultation is intended to address these issues, facilitating ongoing investment and production in the UK Continental Shelf and increasing Exchequer benefits.
This document sets out proposals to provide certainty on decommissioning relief through a Decommissioning Relief Deed (‘the Deed’). Views on this approach are invited from a wide range of stakeholders including individuals, companies, and representative and professional bodies. In particular, the Government invites comments from companies involved in upstream oil and gas production in the UK and UKCS and connected activities, including the provision of financial and legal services.
The Government also published a set of draft clauses for Finance Bill 2013 to provide the legislative framework within which the Deed will operate. The Government is inviting views on these by 6 February 2013.
The Government will consider all responses before finalising the policy design and publishing a final version of the Deed and clauses in spring 2013.