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HMRC internal manual

Oil Taxation Manual

HM Revenue & Customs
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Capital Gains: Computational Points - Farm Ins and Earn Ins

On a farm in or an earn in, any reimbursement of exploration or appraisal expenditure incurred before the date of the farm in agreement is outside the scope of TCGA92\S194(2)(b).

The reimbursement should therefore be treated as cash consideration for the licence interest acquired.