Introduction Summary
1.Section 89 introduces Schedule 31. Part 1 of Schedule 31 makes a number of amendments to existing legislation. These taken collectively have two effects. Firstly, they remove an anomaly whereby in the case of oil fields that were not subject to petroleum revenue tax (PRT), tax relief was not available for expenditure on obtaining an abandonment guarantee and expenditure incurred by a company as a result of another company’s defaulting on its own abandonment commitments. Secondly, these amendments disapply, for the purposes of ring fence corporation tax (RFCT), PRT, and income tax (IT) in the context of oil activities, the general principle that a person is not entitled to relief in respect of expenditure to the extent that it has been met by another party’s contribution (contribution and reimbursement rules). Part 2 of Schedule 31 provides for the taxation of any profit which arises to a person from the incurring of decommissioning expenditure as a consequence of the default of another person. The amendments come into force in relation to expenditure incurred on or after the date of Royal Assent to Finance Act 2013.