Taxation of Chargeable Gains Act 1992 section 195D

Company that receives mixed consideration: N does not exceed C

Section 195D deals with the chargeable gains treatment where a company receives a mixture of licence rights and other (non-licence) consideration in a UK oil licence swap, and the no gain/no loss amount is less than or equal to the non-licence consideration received.

• This section applies where the no gain/no loss amount (N) for the receiving company does not exceed the non-licence consideration (C) it receives in a mixed-consideration swap.
• The receiving company is treated as having acquired each licence for nil consideration, meaning there is no base cost attached to the licences.
• If the company disposes of a single licence, it is treated as making a gain equal to C minus N on that disposal.
• If the company disposes of two or more licences, the total gain of C minus N is apportioned across each licence in proportion to its value relative to the total value of all licences disposed of.