Taxation of Chargeable Gains Act 1992 section 195B

Licence-consideration swap

Section 195B sets out the chargeable gains treatment when two companies swap UK oil licences with each other, ensuring the exchange is treated on a no gain/no loss basis.

• When companies swap oil licences, each company is treated as disposing of its licence(s) for an amount that produces neither a gain nor a loss
• If a company acquires a single licence in the swap, its acquisition cost is set equal to the deemed disposal consideration (i.e. the no gain/no loss amount on the disposal side)
• If a company acquires multiple licences, the deemed disposal consideration is apportioned across the licences acquired in proportion to their respective values
• The deemed disposal consideration is either the no gain/no loss amount for a single licence disposed of, or the total of all such amounts where more than one licence is disposed of