»Ê¹ÚÌåÓýapp

CAA01\S161C

CAA01\S161C provides relief through writing down allowances (WDA) for expenditure on decommissioning offshore infrastructure. »Ê¹ÚÌåÓýapp relief was introduced in FA01, before this a more limited relief was available for the net costs of demolition of offshore oil infrastructure in UK or non-UK oil fields (see OT28350).

For the purpose of this section the expenditure must meet the following conditions:

• the person must be carrying on a trade of oil extraction,
• decommissioning expenditure must be incurred (see OT28330), and
• the plant or machinery concerned -

• must have been brought into use for the purposes of the trade, and
• is, or was when last in use for those purposes, offshore infrastructure (CAA01\S161C(1)).

»Ê¹ÚÌåÓýappre are various things that are excluded from decommissioning expenditure (see OT28320).

»Ê¹ÚÌåÓýapp qualifying expenditure is added to the appropriate pool for the chargeable period in which it is incurred. Relief is then given on the 25% reducing balance basis by adding the decommissioning expenditure to the qualifying expenditure on machinery or plant for the period.

This relief is given to a ring fence trade instead of the special allowance where an election with respect to general decommissioning expenditure (see OT28060) or abandonment expenditure (see OT28100) under CAA01\S164 is not made.

»Ê¹ÚÌåÓýapp relief is also available to non-ring fence oil extraction trades.