Taxation of Chargeable Gains Act 1992 section 195E

Company that gives mixed consideration

Section 195E sets out the capital gains tax treatment for a company that gives mixed consideration (i.e. both a licence and non-licence consideration such as cash) in a swap of UK oil licences between companies within a group or other qualifying relationship.

• The company giving mixed consideration ("company G") is treated as acquiring the new licence(s) at a cost equal to its no gain/no loss amount plus any non-licence consideration it gave, apportioned by value if multiple licences are acquired
• The disposal of a licence by company G under the swap is treated as giving rise to neither a gain nor a loss, but this does not count as a "no gain/no loss disposal" for the purposes of the part-disposal and indexation rules in section 56
• When calculating indexation allowance, any rule that would treat company G's original acquisition of a licence as being the acquisition of the other swapping company is to be ignored
• Where company G disposes of more than one licence in the swap, its overall no gain/no loss amount is the aggregate of the individual no gain/no loss amounts for each licence disposed of