Section 225I | Valuation where relevant appropriation but no disposal

(1)This section applies if conditions A and B are met.

(2)Condition A is that a person makes a relevant appropriation of oil without disposing of it.

(3)Condition B is that the person does so in circumstances such that the market value of the oil—

(a)falls to be taken into account under section 2 of OTA 1975 in calculating for petroleum revenue tax purposes the assessable profit or allowable loss accruing to that person in a chargeable period from an oil field, or

(b)would so fall but for section 10 of that Act.

(4)For income tax purposes, the person is to be treated as having, at the time of the appropriation—

(a)sold the oil in the course of the separate trade consisting of activities falling within the definition of “oil-related activities” in section 16(2) (oil extraction and related activities), and

(b)purchased it in the course of the separate trade consisting of activities not so falling.

(5)For income tax purposes, that sale and purchase is to be treated as having been at a price equal to the market value of the oil—

(a)as so taken into account under section 2 of OTA 1975, or

(b)as would have been so taken into account under that section but for section 10 of that Act.

(6)In this section “relevant appropriation” has the meaning given by section 12(1) of OTA 1975.