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

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

Section 225F ensures that where the market value of oil is used instead of the actual sale price for petroleum revenue tax (PRT) purposes, the same market value must also be used for income tax purposes.

• When oil is disposed of and its market value is used to calculate assessable profit or allowable loss for PRT under section 2 of the Oil Taxation Act 1975, this section applies
• The section also applies where market value would have been used for PRT but for the exemption under section 10 of that Act
• For income tax, both the disposal by the seller and the acquisition by the buyer must be treated as taking place at the same market value used for PRT
• The market value is determined under a comprehensive valuation scheme established for PRT purposes under section 2 of and Schedule 3 to the Oil Taxation Act 1975