»Ê¹ÚÌåÓýapp

[Field Allowance was superseded by Investment Allowance which was introduced by Fiance Act 2015 and applies to expenditure incurred on or after 1 April 2015. See OT21550 for guidance on Investment Allowance.]

»Ê¹ÚÌåÓýapp legislation introduces the concept of ‘reference periodâ€�. A reference period continues while the company’s equity share in the field remains unchanged and an amount of the company’s field allowance is activated in respect of each reference period.

»Ê¹ÚÌåÓýapp amount activated for the reference period follows the model of the straightforward case of an unchanged equity share. »Ê¹ÚÌåÓýapp activated amount is the smallest of:

• »Ê¹ÚÌåÓýapp relevant activation limit,
• »Ê¹ÚÌåÓýapp company’s relevant income from the field in the reference period, and
• »Ê¹ÚÌåÓýapp unactivated amount of the field allowance at the start of the reference period.

»Ê¹ÚÌåÓýapp ‘relevant activation limitâ€� also follows the straightforward model, and is given by the formula:

T/5 x E x R/365

where

• T is the total field allowance for the type of field,
• E is the company’s share of equity in the field during the reference period, and
• R is the number of days in the reference period.

»Ê¹ÚÌåÓýapp company’s relevant income from the field in the reference period needs to be calculated, and is given by the formula:

I x R/L

where

• I is the company’s relevant income from the field in the whole accounting period,
• R is the number of days in the reference period, and
• L is the number of days in the accounting period for which the company is a licensee in the new oil field.

Where a company holds more than one field allowance for a field, to determine the amount of a company’s field allowance to be activated the amount of the company’s relevant income from the field in the reference period is to be reduced by the amount of any earlier field allowance activated for the reference period. If a company began to hold two or more field allowances at the same time, the company can choose the order in which it is to be viewed for the purposes of CTA2010\S341 as having begun to hold them.