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HMRC internal manual

Oil Taxation Manual

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

Where a person makes a disposal and acquisition which is a ring fence reinvestment (see OT30475) and qualifies for relief under either TCGA92\s152 or TCGA92\S153 the person can claim and thereby achieve certain treatment under TCGA92\S198A or TCGA92\S198B (see OT30472). The treatment under either of these rules can be available on a provisional basis.

Where a person carrying on a ring fence trade disposes of, or of an interest in, assets for consideration and in the return for the chargeable period of disposal declares that:

  • the whole or any specified part of the consideration will be applied in the acquisition of, or of an interest in, other assets,
  • the acquisition will take place as mentioned in TCGA92\S152(3),
  • the disposal and acquisition will be a ring fence reinvestment (see OT30475),
  • the person intends to make a claim under TCGA92\S198A or TCGA92\S198B in relation to the disposal and acquisition, and
  • the person has not made, and will not make, a declaration under TCGA92\S153A in relation to the disposal and acquisition.

Then TCGA92\S198A or TCGA92\S198B applies as if the acquisition had taken place and the person had made a claim under that section (see OT30472, TCGA92\S198C).

The declaration ceases to have effect:

  • on the day on which it is withdrawn or superseded, if and to the extent it is withdrawn before the relevant day, or is superseded before that day by a valid claim made under TCGA92\S198A or TCGA92\S198B, and
  • on the relevant day, if and to the extent it is not withdrawn or superseded.

When the declaration ceases to have effect (either wholly or partly) all necessary adjustments are made by making or amending assessments or by repayment or discharge of tax, and any time limits for making or amending assessments are disapplied.

If a person makes a declaration, and the disposal and acquisition is not a ring fence reinvestment (see OT30475) but qualifies for rollover relief or relief under TCGA92\S153, then the person can claim for the declaration to have effect also as a declaration under TCGA92\S153A.

The relevant day is:

  • for CT, the fourth anniversary of the end of the accounting period in which the disposal occurred,
  • for CGT, the third anniversary of the 31 January following the year of assessment in which the disposal of, or of the interest in, the old assets occurred.

The rules in TCGA92\S152 relating to:

  • part of a building or structure not being used for trade purposes,
  • the application of TCGA provisions fixing the amount of consideration deemed to be given for the acquisition or disposal of assets,
  • the apportionment of consideration given for the acquisition or disposal of assets only some or part of which are assets in relation to which a claim applies,

apply also for this section.