Finance Act 2004

Petroleum extraction activities: ring fence trade: charges on income

3 (1) Section 494 of the Taxes Act 1988 (charges on income) is amended as follows.

(2) In subsection (2) (which restricts the loan relationship debits that may be brought into account in a manner resulting in reduction of ring fence profits)—

(a) at the end of paragraph (b) insert “and”;

(b) omit paragraph (d) (which imposes a restriction by reference to a reasonable commercial rate of return and is superseded by the application of paragraphs 1A and 1B of Schedule 28AA to the Taxes Act 1988 by virtue of paragraph 11 of that Schedule);

(c) omit the third sentence (which defines “net debit” for the purposes of paragraph (d)).

(3) Omit subsection (2B) (which relates to the net debit within the meaning of subsection (2)(d)).