Introduction Overview Overview Section 283: Valuation where excess of nominated proceeds
965.This section ensures that where the “nomination scheme” adds an amount to the disposal value of oil for PRT purposes, that amount is also added for corporation tax purposes. It is based on section 493(1A) of ICTA.
966.The corresponding rule for income tax is section 225H of ITTOIA (inserted by Schedule 1 to TIOPA).
967.The “nomination scheme” is part of the mechanism to ensure that the full value of oil extracted from the UK sector is reflected in the profits calculated for PRT and for the ring fence trade. A full description of the scheme can be found in HMRC guidance at OTM 5199.
968.The addition to the price for corporation tax purposes is made even if the relevant oil field is not within the scope of PRT – see subsection (1)(b).
969.Subsection (3) provides for a deduction in computing the profits of a non-ring fence trade. The wording has been changed to clarify its meaning as the source legislation in section 493(1A)(b) of ICTA was unclear. See Change 29 in Annex 1.