Commentary on Sections Glossary Structure of Part 2 Section 170: Participator’s expenditure attributable to plant or machinery
628.This section covers the position of participators who acquire an interest in a production sharing contract from a contractor or participator. If:
	part of the expenditure on acquiring the interest is attributable to plant or machinery; and
	that plant or machinery is treated as owned by a contractor or participator under sections 168 or 169,
then this section will allow plant and machinery to qualify for allowances for the participator acquiring the interest.
629.Subsection (2) deals with the deemed ownership and says when that comes to an end in a similar way to sections 168(2) and 169(2). Disposal events are given by section 171.
630.Subsection (3) creates a disposal event for the person who previously held that interest in the contract, and provides for a disposal value equal to the participators’ expenditure. The participator here is the participator in subsection (1)(a). The attributable expenditure is apportioned – see subsection (6).
631.Subsection (4) is needed because the participator in this section does not actually incur expenditure on plant or machinery. Instead an interest in a contract has been acquired. This subsection therefore deems the participator to have incurred expenditure and to own it as result of incurring that expenditure. The participator can then claim allowances. In sections 168 and 169 the contractor or participator has actually incurred expenditure on plant or machinery which they own, although it has to be transferred under the contract.
632.Subsection (5) deals with the amount of the expenditure that will qualify under this section.
633.Subsection (6) provides for a just and reasonable apportionment of the acquisition expenditure to find the amount of expenditure attributable undersubsection (3).