Taxation of Chargeable Gains Act 1992 section 276

The territorial sea and the continental shelf

Section 276 ensures that gains arising from oil and gas exploration and exploitation activities in UK territorial waters and the continental shelf are brought within the charge to capital gains tax, and sets out how various types of assets, rights and shares connected with those activities are treated.

• The UK territorial sea is deemed to be part of the United Kingdom for all capital gains tax purposes, bringing offshore activities within the tax net.
• Gains on the disposal of exploration or exploitation rights, assets situated on the continental shelf, and unlisted shares deriving most of their value from such rights or assets are all treated as gains on UK-situated assets.
• Non-UK residents disposing of these rights or assets are treated as if the gains arose from assets used in a UK trade carried on through a branch or agency, thereby creating a UK tax charge.
• Certain group company transfer reliefs and related provisions apply to disposals of these rights and assets, but only where the transfer is between companies resident in the same territory, between two UK-resident companies, or from a non-UK-resident company to a UK-resident company.