689 Restriction of relief for losses on certain disposals

Summary

This section provides for a 2 way ring-fence with regard to chargeable gains and allowable losses on disposals of petroleum-related assets (“petroleum-related asset” is defined in section 684).

Details

(1) The preamble overrides the normal capital gains tax rules which provide for the deduction of allowable losses from chargeable gains.

A loss on a disposal of an asset other than a petroleum-related asset may not be deducted from a gain on a disposal of a petroleum related asset.

A loss on a disposal of a petroleum-related asset may not be deducted from a gain on a disposal of an asset other than a petroleum-related asset.

(2) The “roll-over relief” provisions of section 597 are also ring-fenced as respects petroleum trades. Capital gains tax on the disposal of an asset used for the purposes of a petroleum trade carried on by a person will only be deferred by reference to the application of the disposal proceeds on the acquisition of assets to be used in another trade of that person if that other trade is also a petroleum trade.

Relevant Date: Finance Act 2021