Section 225M Tariff receipts etcF1

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

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.

Condition B is that the sum constitutes consideration in the nature of income rather than capital.

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

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

So far as they would not otherwise be so treated, the activities—

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.

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—

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.

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.

In this section—

• “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.