5U.K.After section 198H of TCGA 1992 (acquisition by member of same group) insert—
“198IExploration, appraisal and development expenditure
(1)The incurring of exploration, appraisal and development expenditure in the course of a ring fence trade is to be treated for the purposes of sections 198A to 198H as the acquisition of assets—
(a)which are the new assets mentioned in section 152,
(b)which are taken into use, and used only, for the purposes of the ring fence trade,
(c)which are oil assets, and
(d)which fall within the classes of assets listed in section 155.
(2)The reference in subsection (1) to sections 198A to 198H includes sections 152, 153, 175 and 198(1) so far as they apply for the purpose of determining whether a disposal and acquisition qualifies for roll-over relief or section 153 relief (within the meaning given in section 198F or 198G).
(3)Section 198C has effect in relation to expenditure within subsection (1) of this section as if subsection (5) of that section were omitted.
(4)References in this section to exploration, appraisal and development expenditure are to expenditure on oil and gas exploration, appraisal and development activities which is treated as such under generally accepted accounting practice.
(5)Nothing in this section affects sections 152, 153, 175 and 198(1) so far as they apply otherwise than for the purposes of sections 198A to 198H.
(6)In this section—
“oil asset” has the meaning given in section 198E(5);
“ring fence trade” has the meaning given in section 198.”