Section 198E: Ring fence reinvestments and disposal consideration, Taxation of Chargeable Gains Act 1992

This section applies for the purposes of sections 198A to 198G.

A disposal and acquisition is a ring fence reinvestment if—

the disposal was—

a material disposal, or

a disposal of a UK licence which relates to an undeveloped area,

the old assets were used only for the purposes of P's ring fence trade,

the new assets are taken into use, and used only, for the purposes of one or more of the following trades—

P's ring fence trade;

if P is a member of a group of companies (within the meaning given in section 170), a ring fence trade of another member of that group, and

the new assets are oil assets.

If the disposal consists of—

disposal of a licence to which section 195D(3) applies, or

disposal of two or more licences to which section 195D(4) applies,

the consideration for the disposal is to be taken to be the whole of the non-licence consideration obtained on the disposal (which is referred to as "C" in section 195D).

Accordingly, in sections 198A to 198G (including section 198A(4)), any reference to the consideration obtained on the disposal has effect subject to subsection (3).

Each of the following is an "oil asset" for the purposes of this section—

an interest in oil to be won from an oil field,

an asset used in connection with an oil field,

a structure which is to be placed on the seabed of the United Kingdom continental shelf,

an asset used wholly in the winning of oil, or in the measuring of oil won, in the United Kingdom otherwise than from an oil field,

an asset used for the initial treatment or storage of oil in the United Kingdom,

an asset used for the transportation of oil from an oil field to the United Kingdom, and

a UK licence which relates to an undeveloped area.

Section 12 of the Oil Taxation Act 1975 (interpretation of Part 1 of that Act) applies for the interpretation of subsection (5)(a) to (f).

Expressions used in this section and in section 152 have the same meanings in this section as in section 152.

In this section a reference to a UK licence which relates to an undeveloped area has the same meaning as in section 194 (see section 196).

In this section—

"material disposal" has the meaning given in section 197;
"ring fence trade" has the meaning given in section 198.

Section 198E: Ring fence reinvestments and disposal consideration

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