Taxation of Chargeable Gains Act 1992 section 198L

Expenditure by member of same group

Section 198L extends the oil and gas reinvestment relief under section 198J so that the disposal and the qualifying reinvestment expenditure can be made by different companies, provided both companies belong to the same capital gains group at the relevant times.

• Where one group company disposes of an asset and another group company incurs the qualifying exploration, appraisal or oil-asset expenditure, the reinvestment relief under section 198J can still apply across the two companies.
• The disposing company must be a member of a capital gains group (as defined in section 170) at the time of the disposal, and the company incurring the expenditure must be a member of the same group when the expenditure is incurred.
• Both companies must make a joint claim, and the legislation then treats them as if they were the same person for the purposes of the relief.
• This provision took effect for disposals made on or after 1 April 2014, having been introduced by the Finance Act 2014.