D7.928 Disposals of interests in oil fields etc
Capital gains arising on the disposal of an interest in oil to be won from an oil field or from the disposal of an asset used in connection with that field must be separated or 'ring fenced' from other disposals1.
Chargeable gains arising on deemed disposals under TCGA 1992, s 179(3) (group acquisitions within a six-year period before leaving a group of companies) are also ring fenced, where the chargeable company acquired the asset on the disposal of an interest in an oil field or on the disposal of an asset used in connection with that field2.
These provisions only apply where the disposals or deemed disposals arise in pursuance of the transfer by a participator3 of the whole or part of his interest in an oil field4. For these purposes, an oil field is a determined field as defined for the purpose of petroleum revenue tax5.
Ring fence gains and losses arising in a chargeable period must be aggregated and treated as a single notional gain or loss for the period6.
If a net gain arises, it cannot be relieved by other non-ring fence losses, whether capital, trading or other losses such as non-ring fence group relief and qualifying charitable donations. However, a ring fence gain can be relieved by ring fence trading losses of the same period or such losses carried back from a subsequent period7. It can also be relieved by ring fence capital losses brought forward from an earlier