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HMRC internal manual

Oil Taxation Manual

Capital Gains: Rebasing of Assets Held at 31 March 1982 - Disposals excluded from an election for universal rebasing


TCGA92\Sch3\Para7 excludes certain disposals from the ambit of the universal rebasing election.

The disposals excluded are disposals of, or of an interest in:

  1. plant and machinery
  2. an asset which the vendor has at any time held for the purposes of, or in connection with, a trade (or part of a trade) involving the working of a source of mineral deposits (as defined in CAA01\S394) - this will include a foreign oil licence.
  3. a licence under the Petroleum Act 1998 or the Petroleum (Production) (Northern Ireland) Act 1964.
  4. In relation to disposals after 21 January 1990, shares which on 31 March 1982 were unquoted and derived the greater part of their value directly or indirectly from -
* "oil exploration or exploitation assets" (see viii. below) situated in the UK or UK Continental Shelf, or
* such assets as above and "oil exploration or exploitation rights" taken together.

Plant & Machinery and Mineral Trade Assets

Disposals of plant and machinery and mineral trade assets fall within a. and b. above only where capital allowances have been allowed in respect of any expenditure attributable to the asset, or would have been allowed if claimed. Where the vendor acquired the asset on a “no gain/no loss disposal” this test is made by reference to the vendor, the person who last acquired it otherwise than under a no gain/no loss disposal, or any person who subsequently acquired it on such a disposal (i.e. looking through intra-group transfers under TCGA92\S171).

Oil Licence Disposals

The condition that capital allowances have or could have been claimed does not apply to oil licence disposals. It was felt that non-traders holding licences for areas in which there had been discoveries but no decision to develop could otherwise have established large capital losses on disposals covered by an election.

Share Disposals

The amendment to exclude share disposals was introduced in FA90 to counteract the disposal by oil groups of subsidiary companies which at 31 March 1982 primarily held valuable licence interests and related assets in one or more UK/UK Continental Shelf oil fields. Disposals of shares, would have circumvented the exclusion of disposals of the underlying oil assets and would therefore have been covered by an election. “Shares” include stock and any security as defined in CTA10\S1117(1) but only shares etc which on 31 March 1982 were neither quoted on a recognised stock exchange nor dealt with on the Unlisted Securities Market.