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UK To Announce Oil, Gas Tax Regime Changes Soon

by Amanda Banks, Tax-News.com, London

07 September 2017


The UK Government has said it will present proposals in the upcoming budget to improve the tax conditions for those considering investment in older oil and gas assets.

Exchequer Secretary Andrew Jones told an industry conference: "Because we fully understand the importance of certainty and predictability in the taxes you pay... you can expect a competitive and stable environment in which to plan your investments."

In March 2017, the Government published a discussion paper on potentially allowing a seller of industry assets to transfer a portion of their ring fence corporate tax payment history to the acquirer, being termed a transferable tax history (TTH). Jones said: "We are investigating whether we can make our tax system better to encourage investment in our older oil and gas assets."

"As we promised in the Spring Budget," Jones added, "we will be reporting back [on the TTH proposals] in a few months' time at the Autumn Budget."

Industry experts say that under current rules, new entrants may be discouraged from investing in older assets over concerns that their tax history would not be long enough to qualify for decommissioning tax relief. To resolve this issue, the Government is looking at ways of allowing businesses to transfer part of their tax history alongside the assets on sale.

He added that the Exchequer will provide a total of around GBP24bn (USD31bn) in decommissioning tax relief in respect of North Sea projects.

TAGS: environment | tax | investment | business | United Kingdom | oil and gas

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