News

08 Nov 2019

Oil and Gas Accounting – Deferred Tax

IAS 12 and the initial recognition of decommissioning assets and liabilities  An exposure draft was published in the summer proposing an amendment to the application of the Initial recognition exemption (IRE) to transactions where a deferred tax asset and liability of the same amount are established on initial recognition.  In the past we have seen a wide variation in the accounting in this area but if the proposals are implemented companies may well have to revisit this area.  Representations are […]

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17 Sep 2019

New Partner at CW Energy

We are very pleased to announce that Stephen Kitching, an indirect tax specialist with many years’ experience in the energy sector, has joined our team as a new tax partner. Steve will be based in our new Aberdeen office at 1 Marischal Square, Broad Street Aberdeen AB10 1BL, but will also be spending time in London. This is an exciting development for CW Energy which will enable us to offer a broader range of services in the indirect tax sphere. […]

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04 Jul 2019

Transferable Tax History – Preparation  

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 […]

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27 Mar 2019

Transferable Tax History – Preparation 

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 […]

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21 Mar 2019

Transferable Tax History  – Preparation  

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 […]

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19 Mar 2019

Appeal refused in Leekes loss streaming case

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 […]

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29 Jan 2019

Investment Allowance

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 […]

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30 Oct 2018

2018 Autumn Budget

The Chancellor delivered his 2018 Autumn Budget today. In the Chancellor’s speech there was a welcome confirmation that North Sea tax rates would remain unchanged, together with an announcement that the Government would launch a call for evidence on creating a global centre of excellence for decommissioning in Scotland. Within the detailed announcements there was nothing further directly applicable to the upstream oil & gas sector, other than the Finance Bill contains the previously announced “late life” asset proposals on […]

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16 Jul 2018

Finance Bill and Decommissioning

Decommissioning developments; more options. Draft clauses for the next Finance Bill were published recently which included  a number of measures directed at the oil industry,  intended to assist sales of “late life” assets.  In particular the Finance Bill includes legislation to give effect to the long awaited transferable tax history (TTH) scheme, and proposals to deal with the PRT treatment of “retained” decommissioning obligations following a licence sale. These changes are to be effective for field transfers obtaining OGA consent […]

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13 Jun 2018

Loss Streaming Latest

HMRC – 2    Taxpayers – 1 The taxpayer has been unsuccessful in their appeal against the Upper Tier Tribunal decision in the Leekes loss streaming case. This case was discussed by CW Energy in our Newsbrief of 16 March 2015 and also on 22 July 2016. The Court of Appeal have closely followed the reasoning in the UTT holding that the effect of section 343(3) ICTA 1988 is that the successor to the trade previously carried on by another company […]

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