Income Tax (Trading and Other Income) Act 2005 section 225M

Tariff receipts etc

Section 225M ensures that certain tariff receipts and tax-exempt tariffing receipts earned by oil field participators are brought within the ring fence trade for income tax purposes, even if they would not otherwise be included.

• Tariff receipts and tax-exempt tariffing receipts of an oil field participator that are income in nature must be treated as receipts of the separate ring fence trade covering oil extraction and related activities
• Activities of a participator or a connected person in making assets available that generate these tariff receipts are themselves treated as oil extraction activities for the purposes of ring fence taxation
• Where a person connected with a participator actually receives a tariff receipt, the connected person is treated as if they were a participator, ensuring the receipt is still caught by the ring fence rules
• The definition of "connected person" follows the Oil Taxation Act 1983 Schedule 2 paragraph 11 (associated persons), rather than the standard connected persons definition in section 878(5) of this Act