OT20315 - Corporation Tax General: Sales of Oil etc - Nomination Scheme. Adjustments Ignored

Details of the nomination scheme at FA87\s61 are contained in the PRT Sections Manual.

Under the scheme there are various circumstances in which market value, rather than sale price, is adopted for PRT purposes, e.g. where a company misses the time limit for making a nomination.

Sales before 1st July 2006:

For ICTA88\s493 purposes, any adjustments under the scheme are ignored. S493 requires the substitution of market value for CT purposes where market value is taken into account for PRT purposes under OTA75\s2. In nomination cases, s2 requires not market value but the ‘excess of nominated proceeds’ to be taken into account. The fact that this ‘excess’ is computed by reference to market value is irrelevant.

Sales after 30th June 2006:

FA2006\S151 inserted S493(1A). Where an “excess of nominated proceeds” is charged to PRT (or would have been charged if the field had been subject to PRT) under the FA2006 Nomination scheme (see OT05199) the amount of the excess must be charged to Ring Fence CT.

For the counterparty to the sale to which the excess applied, the amount of the excess is available as a deduction when computing any non-Ring Fence profits.