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HMRC internal manual

Oil Taxation Manual

Corporation tax ring fence: onshore allowance - definition of site


The onshore allowance differs from the then existing field allowances in that it is widened to include activities relating to a site which is defined at CTA2010\S356BC.

For the purposes of Chapter 8 a site (except in the expression “drilling and extraction site”) means:

  1. A drilling and extraction site that is not used in connection with any oil field, or
  2. An oil field (whether or not one or more drilling and extraction sites are used in connection with it).

The definition of site thus covers conventional and unconventional oil and gas areas under (1) and (2), although conventional oil and gas would typically fall under (2).

Where facilities are used both for an oil field and a separate drilling and extraction site then the shared facilities will be regarded as separate drilling and extraction sites with a just and reasonable apportionment of costs made under CTA2010\S356C(8). In particular the exclusion under S356BC(a) “not used in connection with any oil field” will not apply.

Companies carrying out onshore oil-related activities at a shared facility should liaise with the OGA as to the extent of any field determination to ensure that the field boundaries do not overlap with a drilling and extraction site. For example it may be necessary to see a 3D determination or redetermination.