Capital allowances: extended ring fence expenditure supplement for onshore activities - onshore ring fence losses
The starting point for a claim to post-commencement ERFES for an accounting period is an onshore ring fence loss arising in the ring fence trade in the period that could be carried forward under CTA2010\S45 and set against future trading profits.
Where the company has carried on a ring fence trade consisting of both onshore and offshore oil-related activities in the post-commencement period then the onshore ring fence loss is the appropriate proportion of the loss calculated on a just and reasonable basis.
In the case of a straddling period the company’s onshore ring fence loss is calculated by apportionment, normally on a time basis unless felt by the company to work unjustly or unreasonably, with the appropriate proportion of the loss falling on or after 5 December 2013 being the onshore ring fence loss for the straddling period.
The company is then assumed to have made every possible claim under CTA2010\S37 including, where appropriate, CTA2010\S42 to set losses of the period against ring-fence profits of earlier post-commencement periods. This applies whether or not a claim under CTA2010\S37 is actually made.