OT30023 - Capital Gains

Farm Outs. Production.

The consideration for the disposal of an interest in a producing field is generally in the form of cash or shares. However, it may also include the farmer-in granting a residual or subordinated interest in the oil production relating to the proportionate interest required, or paying a consideration dependent wholly or partly, on the extent of future field production. See the general guidance at CG14850+ for the potential capital gains tax consequences.