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HMRC internal manual

Oil Taxation Manual

From
HM Revenue & Customs
Updated
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Capital gains: non residents: special exit charges for non-mobile assets held by a UK branch

Where a person not resident in the UK ceases to carry on a trade in the UK through a branch or agency, he is deemed to have disposed of every exploration or exploitation asset, other than a mobile asset, used in or for the purposes of the trade at or before the time of the deemed disposal and to have reacquired it at its market value.

However, TCGA92\S199(4) disapplies the charge on a non-mobile asset where, immediately after the cessation of the branch or agency trade, the asset is used for the purposes of exploration or exploitation activities carried on by the person in the UK or UK Continental Shelf. This is designed to avoid triggering a deemed disposal in the situation where there is an actual branch being taxed in the UK which closes down and immediately a deemed branch under CTA10\S1170 starts up, so that the CT charge continues. A charge will arise under TCGA92\S199(5) when the person ceases to use the asset for exploration or exploitation purposes, but the cessation must be permanent, not a temporary interruption or suspension of use.