OT66040 - Transferable tax history - TTH allocation on a loss carry back - Closing balance of activated TTH

The closing balance of activated TTH for a period is the total activated TTH amount held by the company for that period, less any TTH activated TTH against which a decommissioning loss has been set in accordance with FA19\Sch15\Para25.

However, this does not apply if there is a TTH reduction amount for the period and that amount is greater than the closing balance of activated TTH for the immediately preceding period, in which case, the closing balance of activated TTH for the current period is the negative amount produced by deducting the TTH reduction amount for the period from the closing balance of activated TTH for the immediately preceding period.

Example

In AP 1 a company has activated £10m TTH. However, the decommissioning loss that the company carries back and sets against the activated TTH is only £4m. Therefore £6m of activated TTH has not been covered by a loss carry back claim. This £6m is the closing balance of activated TTH for the period.

If in AP 2, an additional £8m tariff receipt is received in relation to the field, and a further £1m is spent on decommissioning. This gives a TTH reductions amount (See OT66060) of £7m. This is greater than the closing balance of activated TTH from the immediately preceding AP of £6m. Therefore, the closing balance amount of activated TTH for AP 2 is the negative amount given by subtracting the reduction amount for AP2 from the closing balance of activated TTH from AP 1. This amount is therefore minus £1m for AP2.