§ Mr. Ernie Ross
asked the Chancellor of the Exchequer what steps his Department has taken to ensure that transactions on sale of equipment and services between partners in an offshore licence, which can be set against petroleum revenue tax, occur at true market value.
§ Mr. Peter Rees
[pursuant to his reply, 10 December 1980, c. 641]: Where a transaction is not at arm's length or is between persons connected for the purposes of section 533 of the Taxes Act, schedule 4, paragraph 2 to the Oil Taxation Act 1975, as amended by section 20, Finance (No. 2) Act 1979, has the broad effect of limiting PRT relief for expenditure incurred on equipment to the cost to the seller. If the hon. Member has evidence that this rule is not working adequately perhaps he will let me know.