Your World of Legal Intelligence
 United Kingdom | +44 (0) 20 7284 8080

Chapter OT20203

Document Cited authorities 3 Cited in Related
Vincent
Published date13 March 2016
Record NumberOT20203
CourtHM Revenue & Customs

This covers broadly the period from the obtaining of the licence to the time when a decision is made to develop, or not to develop, a field. The expenditure will mostly be concerned with evaluating the licence area, the drilling of exploration and appraisal wells, and the decision whether to go ahead, or to wait, or to give up the interest.

Expenditure during this period will be mostly capital rather than revenue as there is the bringing into existence of a capital asset (an advantage that is available for the trade). See Atherton v British Insulated and Helsby Cables Ltd 10TC155, reaffirmed and extended by the House of Lords in Granada Motorway Services Ltd v Tucker 53TC92. The Granada case confirmed that in principle expenditure on getting rid of a disadvantage may be capital expenditure in the same way as expenditure on acquiring an advantage. The case also confirmed that in principle, both tangible and intangible costs could be capital expenditure. For one example of the application of the law as to...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT