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HMRC internal manual

Oil Taxation Manual

Decommissioning and abandonment: expenditure on and under abandonment guarantees


CTA2010\S292(1) provides that where expenditure on or under an Abandonment Guarantee (OT28410) qualifies for relief for PRT purposes (OTA75\S31(1)(hh)) it also qualifies as a deduction in computing ring fence income (see OT10300)

No relief is given to a participator in respect of any expenditure met directly or indirectly by a guarantor (CTA2010\S292(3).

Where payments under such a guarantee are invested with other funds rather than being immediately applied, there is provision for any necessary apportionments of expenditure to be made on a just and reasonable basis (CTA2010\S294(2).