ECONOMIC REPORT 2013
47
This has been a substantial and long
standing concern for the industry, which
was exacerbated in the Budget of March
2011 when a restriction was introduced
on the rate of relief allowed. Since then,
Oil & Gas UK has led the industry in working
with the government to secure the necessary
tax reliefs for the whole of the UKCS.
Subsequently, the Finance Act 2013 legislates
for the introduction of Decommissioning
Relief Deeds (DRDs), which will provide
contractual certainty that costs arising from
decommissioning activities can be offset
against tax previously paid by companies (for
RFCT and SC purposes) and fields (for PRT).
Securing certainty for tax relief on
decommissioning is a seminal moment for
the industry. It will mean that the current
barriers to the trading of assets are lifted,
enabling these assets to be transferred to
those companies most likely to develop them.
In turn, this should unlock a significant amount
of new investment to extend the productive
lives of a wide variety of fields. All this has
been achieved at no cost to the government
and without requiring any pre-funding from
the industry.
