Taxation of Chargeable Gains Act 1992 section 198A

Ring fence reinvestment: whole consideration reinvested

Section 198A provides a special relief for oil and gas ring fence trades where the entire disposal proceeds are reinvested in qualifying new assets, allowing the gain to be treated as completely exempt rather than merely deferred under normal roll-over relief.

• Where a person makes a disposal and acquisition that qualifies as both a ring fence reinvestment and roll-over relief, they may elect to claim relief under this section instead of standard roll-over relief.
• If a claim is made, the normal roll-over relief rules under section 152 are switched off entirely in relation to the disposal proceeds.
• Any gain arising on the disposal is treated as not being a chargeable gain at all — effectively a full exemption rather than a deferral of the gain into the cost of the new asset.
• This section applies to disposals made on or after 22 April 2009 and covers the scenario where the whole of the disposal consideration has been reinvested.