Part VI Companies, oil, insurance etc.
Chapter II Oil and mining industries
Oil exploration and exploitation
195AF1Oil licence swaps
1
Sections 195B to 195E apply for the purposes of corporation tax on chargeable gains.
2
In those sections—
“licence-consideration swap” means a case where conditions A, B, C and D are met;
“mixed-consideration swap” means a case where conditions A, B, C and E are met.
3
Condition A is that a company (“company A”) disposes of one or more UK licences to another company (“company B”), by way of a bargain at arm's length (“disposal A”).
4
Condition B is that company B disposes of one or more UK licences to company A, by way of a bargain at arm's length (“disposal B”).
5
Condition C is that either or both of the following paragraphs applies—
a
the licence, or at least one of the licences, comprised in disposal A relates to a developed area;
b
the licence, or at least one of the licences, comprised in disposal B relates to a developed area.
6
Condition D is that both—
a
disposal A is the only consideration given for disposal B, and
b
disposal B is the only consideration given for disposal A.
7
Condition E is that either—
a
disposal A is the only consideration given for disposal B, or
b
disposal B is the only consideration given for disposal A,
(and accordingly one of the disposals is part of the consideration given for the other disposal).
8
In this section and sections 195B to 196 a reference to disposal of a UK licence includes—
a
a disposal of an interest in a UK licence, and
b
a disposal of a UK licence, or an interest in a UK licence, only so far as the licence relates to part of the licensed area.