Section 225M | Tariff receipts etc ^F1

(1)Subsection (5) applies to a sum which meets conditions A, B and C.^F1

(2)Condition A is that the sum constitutes a tariff receipt or tax-exempt tariffing receipt of a person who is a participator in an oil field.^F1

(3)Condition B is that the sum constitutes consideration in the nature of income rather than capital.^F1

(4)Condition C is that the sum would not, but for subsection (5), be treated as mentioned in that subsection.^F1

(5)The sum is to be treated as a receipt of the separate trade mentioned in section 16(1) (oil extraction and related activities).^F1

(6)So far as they would not otherwise be so treated, the activities—^F1

(a)of a participator in an oil field, or^F1

(b)of a person connected with the participator,^F1

in making available an asset in a way which gives rise to tariff receipts or tax-exempt tariffing receipts of the participator are to be treated for the purposes of this Chapter as oil extraction activities.

(7)In determining for the purposes of subsection (2) whether a sum constitutes a tariff receipt or tax-exempt tariffing receipt of a person who is a participator, no account may be taken of any sum which—^F1

(a)is in fact received or receivable by a person connected with the participator, and^F1

(b)constitutes a tariff receipt or tax-exempt tariffing receipt of the participator.^F1

But in relation to the person by whom such a sum is actually received, subsection (2) has effect as if the person were a participator and as if condition A were met.

(8)References in this section to a person connected with a participator include a person with whom the person is associated, within the meaning of paragraph 11 of Schedule 2 to the Oil Taxation Act 1983, but section 878(5) of this Act (application of definition of “connected” persons) does not apply for the purposes of this section.^F1

(9)In this section—^F1

“tax-exempt tariffing receipt” has the meaning given by section 6A(2) of the Oil Taxation Act 1983, and

“tariff receipt” has the same meaning as in that Act.