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HMRC internal manual

Oil Taxation Manual

HM Revenue & Customs
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PRT: allowable losses - unrelievable field losses - acquisition of interests in producing fields

FA84\S113(2) prevents a company using a UFL to reduce the assessable profits of a field, the interest in which was acquired after the field giving rise to the loss was accepted as having permanently ceased production. FA84\S113(2) denies relief for any UFL unless the date on which the winning of oil from that field permanently ceased fell on or after the participator’s ‘qualifying date’.

For the definition of qualifying date, see OT13825. FA84\S113 is also relevant to expenditure claims under OTA75\S5 (see OT13950) or OTA75\S5A (see OT13975).

A company qualifies in respect of a licensed area if it is the licensee or an X company in an illustrative agreement.