Income Tax (Trading and Other Income) Act 2005 section 225D

Meaning of "ring fence trade"

Section 225D defines what is meant by a "ring fence trade" for the purposes of this chapter.

  • A ring fence trade refers specifically to oil extraction and related activities as defined in section 16(2) of the Act
  • Those activities must also constitute a separate trade, whether required by section 16(1) or for any other reason
  • The ring fencing ensures that profits and losses from oil-related activities are kept separate from other trading activities
  • This definition is relevant to the tax treatment of trades involving UK oil extraction throughout this chapter

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