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HMRC internal manual

Oil Taxation Manual

Non-Residents Working on the UK Continental Shelf: Capital Allowances - Rigs as ships

What is a ship

This is covered at OT41610.

Special rules

There are special rules relating to plant & machinery allowances arising on expenditure on ships whereby a taxpayer can postpone writing-down allowances on ships - CAA 2001\S127 to CAA01\S133. In essence the writing-down allowances are stockpiled and taken in subsequent chargeable periods.

Long life assets

The long-life asset rules at CAA01\S90 et seq could affect drilling rigs as they may be regarded as offshore installations and the rules are covered at OT26600.

Part use

Where a rig is subject to the special rules for ships any use in the worldwide trade would create a disposal event under CAA01\S61(1)(e) - plant or machinery begins to be used wholly or partly for purposes other than those of the qualifying activity - and the rules at CAA2001\S132(2) would apply in dealing with the disposal event.