Corporation Tax Act 2010 section 275

Ring fence income

Section 275 defines the term "ring fence income" as used within the ring fence corporation tax provisions for oil and gas companies.

• Ring fence income means income that arises from oil extraction activities or from oil rights.
• This definition is a key building block for determining a company's overall "ring fence profits" (as set out in section 276).
• The ring fence concept ensures that profits from UK oil extraction are taxed separately and cannot be sheltered by losses or expenses from other non-oil activities.
• An equivalent income tax rule exists for individuals and non-corporate entities under section 225C of the Income Tax (Trading and Other Income) Act 2005.