OT28047 | Decommissioning and abandonment: general decommissioning expenditure: meaning of general decommissioning expenditure - expenditure incurred on or after 3 March 2021

CAA2001\S163

The term general decommissioning expenditure was amended by FA2021 to ensure three types of decommissioning expenditure incurred before the formal approval of an abandonment programme (see OT28045) qualify. Relief given in respect of some of this expenditure may be clawed back if the formal approval is not given within five years of the expenditure being incurred (CAA2001\S163A).

The three types of decommissioning expenditure are broadly:

• Expenditure incurred in the preparation of an abandonment programme. This relief is not subject to any potential clawback. (CA2001\S163(3AB))

• Expenditure incurred in preserving plant or machinery, the reuse or demolition of which it is reasonable to assume will be authorised, or required by, or in connection with an approved abandonment programme. This relief is not subject to any potential clawback. (CA2001\S163(3AA)(a))

• Expenditure incurred in doing something that it is reasonable to anticipate will be contained in an approved abandonment programme or expenditure incurred in doing something that would comply with a condition to which it is reasonable to anticipate the approval of an abandonment programme will be subject. (CA2001\S163(3AA)(b))