Oil Taxation Act 1975 Schedule 3 paragraph 5

Effect of transfer to an associated company of participator's rights etc. in connection with an oil field or relevant licence

Schedule 3 paragraph 5 deals with what happens for petroleum revenue tax purposes when a participator in an oil field transfers its share of oil production and related rights or obligations to an associated company.

• Where a participator transfers ownership of its share of oil and related rights, interests or obligations to an associated company, the associated company is treated as if it had always been the participator in the field for PRT purposes.
• All actions taken by or in relation to the original participator in connection with the field are treated as having been done by or in relation to the associated company, and all the participator's rights, interests and obligations are similarly attributed to that company.
• If the associated company fails to pay any PRT or interest within thirty days of the due date, HMRC can issue a written notice requiring the original participator to pay the outstanding amount immediately, while retaining the right to also pursue the associated company.
• Two parties are "associated" if one controls the other or both are under common control, where "control" has the meaning given by section 1124 of the Corporation Tax Act 2010, and "company" means any body corporate.