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 this has not been implemented. Instead, the Treasury is relying on Deed holders to take the initiative to implement the changes.

The changes required are found in the ‘alternative Schedule’ which can be downloaded from 

https://www.gov.uk/government/consultations/decommissioning-relief-deeds-increasing-tax-certainty-for-oil-and-gas-investment-in-the-uk-continental-shelf

There is no downside from the amended wording.

To amend the Deed to incorporate the changes contained in this alternative schedule the company must make an election by giving notice to the Treasury (as the Government Counterparty). 

The election should give notice that the company elects to adopt the enclosed Alternative Schedule for the purposes of the Decommissioning Relief Deed entered into between the Lords Commissioners of Her Majesty’s Treasury (the “Government Counterparty”) and [COMPANY] (the “Company”) dated [DATE].

This election must be made in accordance with Clause 12 (Notices) of the Deed which requires the election to be signed and sent to the address used in the Deed. In the latest online version of the Deed this is given as Director of Business and International Tax, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ , and copied to: Deputy Director Oil and Gas, HMRC, LBS Oil & Gas, 5th Floor, SW Bush House, Strand, London WC2B 4RD, although Deed holders should check the addresses used in their particular Deed.

Upon receipt by Treasury of such notice, the Deed will incorporate the alternative schedule, and the Deed holder will be in a position to be a party to a valid TTH election (as seller). 

We recommend verifying that the Treasury has received and accepted the election – the email is Decommissioning.Certainty@hmtreasury.gov.uk


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