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HMRC internal manual

Oil Taxation Manual

Capital gains: valuation of oil assets including shares: rebasing to 31 March 1982

The need for valuations at 31 March 82 first arose from the introduction of indexation by FA85\S68 and continues as a result of rebasing under FA88.

High oil prices in 1982 often mean that asset values at 31 March 1982 were higher than original cost. As a result, the combination of a high rebased cost and indexation may result in chargeable gains being materially reduced or indeed the creation or augmentation of losses.

The kink test and the loss rules for oil industry assets disposed of after 21 January 1990 will normally reduce any allowable losses.

The high oil price in 1982 in relation to the late 1970s is a major factor affecting the comparison between the value of licences and their cost as at 31 March 1982.