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HMRC internal manual

Oil Taxation Manual

Capital gains: non residents: disposal of oil and oil related assets

Disposals of assets within TCGA92\S276 fall into three broad categories:

  1. Exploration or Exploitation Rights (TCGA92\S276(2)(b)).
  2. Exploration or Exploitation Assets (TCGA92\S276(4)(a)).
  3. Unquoted Shares deriving the whole or the greater part of their value from one of the two categories above, or from both taken together (TCGA92\S276(2)(c) and TCGA92\S276(4)(b).

Exploration or exploitation rights are defined in wide terms to ensure that a charge arises on all rights to a share of production profits in whatever form such as, for example, an overriding royalty interest or a beneficial interest in a production licence under the terms of an illustrative agreement (see OT30813). Specifically, they are defined by TCGA92\S276(2)(b) as:

  • rights to assets to be produced by exploration or exploitation activities or
  • rights to interests in or to the benefit of such assets.