Corporation Tax Act 2010 section 332I

Introduction to sections 332IA and 332IB

Section 332I sets out the circumstances in which investment allowances associated with a qualifying oil field may be transferred when a company disposes of all or part of its equity share in that field, and defines three key conditions that trigger the transfer rules.

• When a company (the transferor) disposes of all or part of its equity share in a qualifying oil field, and at least one of three specified conditions is met, the transfer-of-allowance rules in sections 332IA and 332IB come into play.
• The "unactivated allowance condition" is met where the transferor still holds unactivated investment allowance for the oil field immediately before the disposal takes place.
• The "section 332DA expenditure condition" is met where the transferor has accumulated relevant expenditure attributable to its equity share in the oil field (under the rules for fields that qualified as new fields) and the disposal occurs before the material completion date for the field.
• The "section 332DB expenditure condition" is met where the transferor has accumulated relevant expenditure attributable to its share of project-related reserves in the oil field (under the rules for additionally-developed fields) and the disposal occurs before the material completion date for the relevant project.