In Marathon Oil UK v HMRC [2017] UKFTT 822 (13 November 2017) the FTT held that the special allowance for decommissioning was not available in circumstances where transactions had been implemented for the sole purpose of crystallising the relief early.
The commercialisation of an oil or gas field typically involves four phases: exploration and appraisal; development; production; and decommissioning. In the decommissioning phase with which this appeal was concerned the infrastructure which has been installed must be removed shut down and made safe.
Marathon Oil Decommissioning services (MODS) was incorporated as a wholly-owned subsidiary of Marathon Oil UK (MOUK) which had exploited an oil field. Under a decommissioning services agreement (DSA) MOUK paid $300m to MODS in December 2008. MOUK then filed its tax return electing to have a ‘special allowance’ under CAA 2001 in relation to the payment to MODS...
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In Marathon Oil UK v HMRC [2017] UKFTT 822 (13 November 2017) the FTT held that the special allowance for decommissioning was not available in circumstances where transactions had been implemented for the sole purpose of crystallising the relief early.
The commercialisation of an oil or gas field typically involves four phases: exploration and appraisal; development; production; and decommissioning. In the decommissioning phase with which this appeal was concerned the infrastructure which has been installed must be removed shut down and made safe.
Marathon Oil Decommissioning services (MODS) was incorporated as a wholly-owned subsidiary of Marathon Oil UK (MOUK) which had exploited an oil field. Under a decommissioning services agreement (DSA) MOUK paid $300m to MODS in December 2008. MOUK then filed its tax return electing to have a ‘special allowance’ under CAA 2001 in relation to the payment to MODS...
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