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HMRC internal manual

Oil Taxation Manual

Capital gains: consideration other than cash: licence swaps - mixed consideration given - disposals made on or after 22 April 2009

Where the company that gives mixed consideration acquires only one licence, it is treated as if it had acquired the licence for the total of its no gain/no loss amount (N) and the non-licence consideration (C) given.

Where that company acquires two or more licences, it is treated as if it acquired each licence for that proportion of (N+C) that the value of each licence acquired bears to the total value of all the licences acquired (TCGA92\S195E).

The disposal by that company of a licence under the swap is treated as a no gain/no loss disposal after taking account of indexation allowance. This no gain/no loss disposal is not included in the list of ‘the no gain/no loss provisions’ in TCGA92\S288(3A).

See OT30139 for the tax treatment of expenditure incurred by a company on a licence disposed of under a mixed-consideration swap and reimbursed by the company to whom the disposal is made.