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HMRC internal manual

Oil Taxation Manual

Capital gains: consideration other than cash: definitions

TCGA92\S196 AND TCGA92\S195A

A UK licence that relates to a developed area is any UK licence apart from one that relates to an undeveloped area (see OT30043).

Development has its PRT meaning as at FA83\S36(4) and FA83\S36(5) and covers the carrying out, or erection, of permanent works to win or transport oil from the field, other than in the course of searching for oil or drilling works.

Disposal of a UK licence includes

  • a disposal of an interest in a UK licence, and
  • a disposal of a UK licence, or an interest in a UK licence, only so far as the licence relates to part of the licensed area.

Licence-consideration swap has the meaning given in TCGA92\S195A(2).

Mixed-consideration means consideration that consists partly of disposal of a UK licence.

Mixed-consideration swap has the meaning given in TCGA92\S195A(2).

No gain/no loss amount in relation to a company that disposes of a UK licence, means the amount that would be taken to be the consideration for the disposal if TCGA92\S56(2) applied to the disposal.

Non-licence consideration means consideration that does not consist of disposal of a UK licence, but see OT30140.

Swap arrangements, in relation to a licence-consideration swap or a mixed-consideration swap, means the arrangements under which the swap takes place.

The value of a licence is the value of the licence as determined under the swap arrangements at the time the swap arrangements are entered into, or at the effective time if under the swap arrangements economic benefits and liabilities under the licences concerned are treated as passing at a time (‘the effective time’) which falls before or after the day on which the arrangements are entered into (see OT30140)

UK licence has the same meaning as in Part 1 OTA1975.

TCGA92\S195(6) also defines other terms including oil and interest in relation to a licence.