The proposed transferable tax history mechanism will allow companies selling North Sea oil and gas fields to transfer some of their tax payment history to their buyers. This means that buyers will be able to offset the costs of decommissioning against the transferable tax history.
HM Treasury’s announcement is intended to encourage fresh investment in order to release the estimated 20bn barrels of oil remaining on the UK Continental Shelf (UKCS) and maximise economic recovery.
Under the current rules tax relief for decommissioning expenditure is based on the tax history of the company incurring the expenditure. The government believes that the introduction of transferable tax history will provide potential buyers with more certainty that they will be able to access tax relief on their decommissioning costs.
Previously potential buyers had to assess whether they would be able to generate sufficient tax history over the remaining life of...
