Section 198 — Taxation of Chargeable Gains Act 1992: Replacement of business assets used in connection with oil fields.

Replacement of business assets used in connection with oil fields. 198 1 If the consideration which a person obtains on a material disposal is applied, in whole or in part, as mentioned in subsection (1) of section 152 or 153, that section shall not apply unless the new assets are taken into use, and used only, for the purposes of the ring fence trade.

2 Subsection (1) above has effect notwithstanding subsection (8) of section 152. 2A But subsection (1) is subject to section 198A(3)(a).

3 Where—

a section 152 or 153 applies in relation to any of the consideration on a material disposal, and b the asset which constitutes the new assets for the purposes of that section is a depreciating asset, section 154(2)(b) is to have effect as if the reference to a trade carried on by the claimant were a reference solely to the claimant's ring fence trade.

4 In any case where sections 152 to 154 have effect in accordance with subsections (1) to (3) above, the operation of section 175 shall be modified as follows—

a only those members of a group which actually carry on a ring fence trade shall be treated for the purposes of those sections as carrying on a single trade which is a ring fence trade;

and b only those activities which, in relation to each individual member of the group, constitute its ring fence trade shall be treated as forming part of that single trade.

5 In this section—

a “ material disposal ” has the meaning assigned to it by section 197;

and b “ ring fence trade ” means a trade consisting of activities falling within the definition of “oil-related activities” in section 16(2) of ITTOIA 2005 or section 274 of CTA 2010 .