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HMRC internal manual

Oil Taxation Manual

PRT: non-field expenditure - research expenditure: outline

OTA75\S5B

Prior to FA87, certain expenditure on research which had been incurred for the purposes of UK or UK Continental Shelf (UKCS) oil extraction activities, but which was neither specific to a particular field or fields nor incurred for a specific exploration or appraisal project, did not qualify for relief. Examples might include research on the respective advantages of steel and concrete platforms, coating systems for pipelines, and mathematical modelling of reservoirs.

OTA75\S5B, introduced by FA87\S64 and FA87\SCH13, provides relief for such expenditure (whether or not of a capital nature) incurred on or after 17 March 1987 by participators in fields if, three years after the date the expenditure was incurred it has not become allowable in any field. The three-year wait is designed to ensure that only expenditure that does not relate to a specific field or fields will qualify; it is considered sufficient time to establish that there is no such link.

See OT14125 for detail of the conditions to relief.