Paragraph 6

For the purposes of this Schedule, expenditure is “qualifying pre-commencement expenditure” if it meets conditions A to D.

Condition A is that the expenditure is incurred on or after 1st January 2006.

Condition B is that the expenditure is incurred in the course of oil extraction activities.

Condition C is that the expenditure is incurred by a person with a view to carrying on a ring fence trade but before the person sets up and commences the ring fence trade.

Condition D is that the expenditure—

For the purposes of this paragraph, expenditure incurred by a company is “relevant R&D expenditure incurred by an SME” if—

In the case of any qualifying pre-commencement expenditure which is relevant R&D expenditure incurred by an SME, the amount of that expenditure is treated for the purposes of this Schedule as being equal to 150% of its actual amount.

In the case of any qualifying pre-commencement expenditure which is relevant R&D expenditure incurred by a large company, the amount of that expenditure is treated for the purposes of this Schedule as being equal to 125% of its actual amount.

For this purpose “relevant R&D expenditure incurred by a large company” means F3qualifying Chapter 5 expenditure as defined by section 1076 of CTA 2009 (R&D tax relief for large companies).