Corporation Tax Act 2010 section 281

Valuation where market value taken into account under section 2 of OTA 1975

Section 281 ensures that where the market value of oil replaces the actual sale price for petroleum revenue tax purposes, the same market value must also be used for corporation tax purposes.

• When oil is disposed of and its market value is used to calculate assessable profit or allowable loss for petroleum revenue tax under section 2 of OTA 1975, that same market value must be used for corporation tax on income.
• The rule applies equally to both the seller and the purchaser of the oil — both parties are treated as if the transaction took place at the petroleum revenue tax market value.
• The rule also applies where the market value would have been taken into account for petroleum revenue tax purposes but for the exemption under section 10 of OTA 1975.
• The market value used is determined under a comprehensive valuation scheme established for petroleum revenue tax purposes under section 2 of and Schedule 3 to OTA 1975.