SolvedOT18131 | PRT: transfer of licence interests - terminal losses: example 1
From HM Revenue & Customs · Oil Taxation Manual
Participator A has a 100% interest in Field Z. A transfers a 50% interest to B and a 50% interest to C. C subsequently transfers his interest to D. The loss accruing to D that is not relievable against its own profits is 1200. The remaining loss is utilised as follows:
| Participator | Assessable profit | Relievable profit |
|---|---|---|
| C | 500 | 500 |
| B | 500 | Nil |
| A | 1000 | 500 |
Participator C: the whole of the interest held by C is comprised in D’s interest so all of C’ s assessable profits are attributable to its represented interest.
Participator B: none of B’s interest is comprised in D’s interest so none of B’s assessable profits are attributable to a represented interest.
Participator A: 50% of the interest held by A is comprised in D’s interest so 50% of A’ s assessable profits are attributable to its represented interest.
D’s UFL is 200 (remaining loss 1200 less amounts relieved against the assessable profits of A and C).