For a valid TTH election to be made, the seller of the interest cannot be the holder of a Decommissioning Relief Deed with the original wording, since such Deed would expose the Exchequer to a potential double claim to relief. In our March 27 news item, we advised Decommissioning Relief Deed holders of the Treasury’s plan to contact Deed holders to assist in implementing the changes to the Deed which are required for a valid TTH election. However, we understand […]

Our Tax Newsletter of 21 March encouraged potential sellers of interests to ensure their Deeds were amended if they were contemplating taking advantage of the transferable tax history (TTH)  rules. We now understand that the Treasury will contact all Deed holders to implement the changes to the Deed to make them compatible with the TTH rules. We understand this will happen within weeks and will involve the Treasury sending the revised wording to the Deed holder. Furthermore, we understand that […]

The transferable tax history rules are now law. However, any seller of a licence interest who has a Decommissioning Relief Deed in place cannot make an election to transfer tax history unless the Deed contains a provision to ensure the seller cannot make a Deed claim that effectively relies upon tax history that has been transferred. Specifically, the Deed must provide that the total transferred amount of tax history is removed from the calculation of the “reference amount”; which is […]

Supreme Court refuse taxpayer permission to appeal in the Leekes loss streaming case.  It looks like the end of the line for the loss streaming appeal by Leekes as the Supreme Court refused the taxpayer permission to appeal because the application did not raise an arguable point of law. The taxpayer had argued that where there had been a succession in the case of the transfer of the whole of the trade, the streaming rules set out in s343(8) did […]

Changes in Activation rules: Tariff receipts Secondary legislation has now been brought into effect to allow tariff receipts to be included within relevant income for the purposes of determining the level of investment allowance or cluster allowance that can be activated. Tariff income activates investment allowance or cluster allowance for the field or cluster to which the tariffs are ‘attributable’.  Note the rules for attribution do not follow the PRT rule concept of a chargeable field so if a qualifying […]

Marathon have lost their appeal in the First Tier Tribunal for their claim for relief for expenditure incurred under an “acceleration” scheme which they entered into in 2008 under the special decommissioning relief provisions in s163/s164 CAA 2010 as they applied at that time. Marathon Oil U.K., LLC (“MOUK”), was the licence holder for a number of the group’s North Sea assets. They entered into an arrangement to secure relief in advance of decommissioning work actually being carried out in […]

Philip Hammond presented his Budget today. This note sets out the main announcements that are targeted at oil and gas companies operating in the UK and UKCS. TTH for late life assets The main item directly affecting the oil and gas industry was the announcement regarding the proposed introduction of transferable tax history (TTH). The intent of the proposals is to facilitate the transfer of mature field interests to companies which would otherwise be unable to obtain effective relief for […]