Part VI Companies, oil, insurance etc.
Chapter II Oil and mining industries
Oil exploration and exploitation
195BF1Licence-consideration swap
1
This section applies to a licence-consideration swap.
2
Each company participating in the swap is to be treated as follows.
3
As regards the licence, or each licence, which the company disposes of, the company is to be treated as if it had disposed of that licence for a consideration of such amount as to secure that on the disposal neither a gain nor a loss accrues to the company.
4
In a case where the company acquires only one licence, the company is to be treated as if it had acquired the licence for a consideration of the same amount as the deemed disposal consideration.
5
In a case where the company acquires two or more licences, as regards each licence acquired, the company is to be treated as if it had acquired that licence for a consideration of—
where—
DDC is the deemed disposal consideration,
A is the value of the licence acquired, and
TA is total value of all the licences acquired.
6
In this section “deemed disposal consideration”, in relation to a company participating in the swap, means—
a
the amount of the consideration for which the company is, under subsection (3), treated as having disposed of its licence (if the company disposes of only one licence), or
b
the aggregate of all such amounts (if the company disposes of two or more licences).