Treasury revises oil and gas tax history compliance
9 Apr 2019
The Treasury has published detail of the alternative schedule to the decommissioning relief deed (DRD) that oil and gas companies are required to sign before they elect to transfer their tax history
9 Apr 2019
The DRD provides certainty for oil and gas companies over the tax relief they will receive when decommissioning assets in the future.
The Finance Act 2019 makes provision for a transferable tax history (TTH) mechanism, by which a seller of an oil licence may, on a joint election with a purchaser, transfer its tax history to the purchaser.
To make a valid TTH election in circumstances where the seller has entered into a DRD, the seller must enter into an alternative schedule. This is to ensure that the total TTH amount is to be disregarded when determining the reference amount under the DRD.
The Treasury has now published the text of the alternative schedule to the DRD needed to meet this requirement. This prohibits companies from seeking to claim for transferred tax history through the DRD.
By Pat Sweet