OT30472 - Capital gains: extension of ring fence: assets used in connection with oil fields - disposals made on or after 22 April 2009

OT30471 sets out the restrictions that TCGA92\S198 applies to rollover relief for gains on assets within the specified classes. For disposals made on or after 22 April 2009 the presumption that the new asset is a depreciating asset in the ring fence trade (such that TCGA92\S154 applies with the necessary modifications) is removed.

If the new asset is a depreciating asset the gain is held over until the earliest of:

  • disposal of the new asset or,
  • cessation of use of the new asset for the ring fence trade or,
  • ten years from the acquisition of the new asset.

However, where a person makes a disposal and acquisition which is a ring fence reinvestment (see OT30475) and qualifies for rollover relief the person can claim with the effect that

  • TCGA92\S152 (rollover relief) does not apply to any of the disposal consideration, and
  • any gain accruing to the person on the disposal is not a chargeable gain (TCGA92\S198A).

Disposal consideration means the whole of the consideration obtained on the disposal made by the person.

Where a person makes a disposal and acquisition which is a ring fence reinvestment (see OT30475) and qualifies for TCGA92\S153 relief, the person can claim with the effect that:

  • S153(1)(a) applies in relation to the person and the disposal (reduction of gain), but
  • S153(1)(b) does not apply to the person and the acquisition (reduction in cost of new asset) (TCGA92\S198B).

The treatment under either of these rules can be available on a provisional basis (see OT30473).

Rules also exist to prevent double claims (see OT30474).