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HMRC internal manual

Oil Taxation Manual

Capital Allowances: Long Life Assets - Are Floating Production Storage and Offloading Vessels a single asset?

An asset will be considered as a separate asset if it would be so considered under the entirety concept. The entirety concept extends beyond the oil industry and is to be found in tax case law see CA23720 and BIM35435 for further guidance.

If the entire asset has an expected working life in excess of 25 years it is a long life asset and it is not permissible to point to parts or components thereof that might need replacement before 25 years.

The application of these principles is not always straight forward, however HMRC would not expect Floating Production Storage and Offloading Vessels (FPSO’s) to be treated as a single asset.