Corporation Tax Act 2010 section 277

Ring fence trade

Section 277 defines the term "ring fence trade" as used throughout Part 8 of the Corporation Tax Act 2010, which deals with oil activities.

• A ring fence trade must involve activities that qualify as "oil-related activities" as defined in section 274 of the Act.
• Those oil-related activities must also constitute a separate trade, whether by virtue of the deemed separation rule in section 279 or for any other reason.
• Both conditions must be met simultaneously — the activities must be oil-related and must form a distinct, separate trade.
• The ring fence concept exists to ensure that profits and losses from UK oil extraction are kept separate from a company's other trading activities for corporation tax purposes.