OT30479 - Capital gains: Extension of ring fence: reinvestment after pre trading disposal

A disposal and acquisition qualifies for relief if it meets the following conditions:

  • the company making the disposal carries on exploration and appraisal (E&A) activities and has not started a ring fence trade at the time of the disposal (an 바카라 사이트˜E&A company바카라 사이트™);
  • the disposal is:
  • a disposal of assets which are within the classes of assets listed in section 155 (CG60410 & CG60950+) and which are used by the company only for E&A activities (relevant E&A assets); and either
  • a disposal of a UK licence which relates to an undeveloped area; or
  • a disposal of an asset used in an area covered by a licence under Part 1 of the Petroleum Act 1998 or the Petroleum (Production) Act (Northern Ireland) 1964 which authorises the company to undertake E&A activities;
  • the company reinvests the proceeds in either:
  • E&A expenditure at a time when the company is an E&A company; or
  • oil assets used only for the company바카라 사이트™s ring fence trade.

E&A expenditure is expenditure that generally accepted accounting practice would recognise as incurred for the purposes of oil and gas E&A activities. This includes the acquisition of relevant E&A assets, for example a UK licence which relates to an undeveloped area.

Oil assets are defined at S198E and include - exploration, appraisal and development expenditure as provided in S198I (OT30475). The company바카라 사이트™s ring fence trade does not need to have commenced prior to the acquisition of the oil assets, that is, the acquisition of a producing asset by a pre-trading company would qualify as it would trigger the commencement of a ring fence trade.