Legislation – Finance Act 2025

“2Additional expenditure treated as incurred for purposes of section 1

(1)

This section applies for the purposes of section 1 if, in a qualifying accounting period, a company has incurred investment expenditure.

(2)

Expenditure is “investment expenditure” of a company so far as the expenditure—

(a)

is capital expenditure on the de-carbonisation of its upstream petroleum production,

(b)

is incurred for the purposes of oil-related activities,

(c)

is not incurred for disqualifying purposes, and

(d)

does not consist of financing costs or decommissioning costs.

(3)

For the purposes of section 1 the company is to be treated as if, in addition to the investment expenditure incurred by it in the accounting period, it had incurred in that period expenditure of an amount equal to 66% of the amount of that investment expenditure.

(4)

For the purposes of this section—

(a)

if investment expenditure is incurred partly for the purposes of oil-related activities and partly for other purposes, the expenditure is to be attributed to the oil-related activities on a just and reasonable basis, and

(b)

if a company incurs expenditure part of which is capital expenditure on the de-carbonisation of its upstream petroleum production and part of which is not, the expenditure is to be apportioned on a just and reasonable basis.

(5)

This section needs to be read with section 6 (which prevents recycling etc of assets to generate relief).”