Section 356JF | Generation of cluster area allowance ^F1

(1)Subsection (2) applies where a company—^F1

(a)is a licensee in a licensed area or sub-area which is wholly or partly included in a cluster area, and^F1

(b)incurs any relievable investment expenditure on or after 3 December 2014 in relation to the cluster area.^F1

(2)The company is to hold an amount of allowance equal to 62.5% of the amount of the expenditure.Allowance held under this Chapter is called “cluster area allowance”.^F1

(3)For the purposes of this section investment expenditure incurred by a company is “relievable” only if, and so far as, it is incurred for the purposes of oil-related activities (see section 274).^F1

(4)Subsections (1) to (3) are subject to section 356JFA (which prevents expenditure on the acquisition of an asset from being relievable in certain circumstances).^F1

(5)Cluster area allowance is said in this Chapter to be “generated” at the time when the investment expenditure is incurred (see section 356JN) and is referred to as being generated—^F1

(a)“by” the company concerned;^F1

(b)“in” the cluster area concerned.^F1

(6)Where—^F1

(a)investment expenditure is incurred only partly for the purposes of oil-related activities, or^F1

(b)the oil-related activities for the purposes of which investment expenditure is incurred are carried on only partly in relation to a particular cluster area,^F1

the expenditure is to be attributed to the activities or area concerned on a just and reasonable basis.