In view of the restriction in CAA01/S407 and CAA01/S411whereby
expenditure attracting allowances at the 25% rate is restricted by
reference to a predecessor's costs, it is unlikely that claims for
relief at the higher 25% rate in excess of a predecessor's costs
will be met.
In deciding how much expenditure is attributable to the
predecessor’s expenditure on mineral exploration and access,
apportionment problems can arise if there are a series of
disposals. Challenges to a taxpayer's apportionment should only be
made in significant cases where distortion appears to have taken
place.
An example of this might be where it is claimed that the
portion eligible for 25% relief has increased in value more quickly
than the portion eligible for 10% relief.
If agreement cannot be reached the case should be referred to
Energy Group (Oil Taxation Office) before any appeals are listed
for the Commissioners.
