Taxation of Chargeable Gains Act 1992 section 199

Exploration or exploitation assets: deemed disposals

Section 199 sets out the circumstances in which a person is treated as having disposed of and immediately reacquired exploration or exploitation assets used in the UK oil and gas sector, triggering a capital gains tax or corporation tax event at market value.

• When a mobile exploration or exploitation asset ceases to be dedicated to an oil field in which the owner (or a connected person) is or has been a participator, the owner is deemed to have disposed of and reacquired the asset at market value immediately before that cessation.
• When a non-UK resident person ceases to trade in the UK through a branch or agency, they are deemed to have disposed of and reacquired all non-mobile exploration or exploitation assets used in that trade at market value immediately before that cessation.
• The deemed disposal for non-UK residents ceasing to trade through a branch or agency does not apply if the asset continues to be used for exploration or exploitation activities in the UK or a designated area — but a deemed disposal is triggered if such use later ceases.
• An asset is chargeable for these purposes if a disposal of it at the relevant time would give rise to gains subject to capital gains tax or corporation tax under the territorial scope rules.