OT30135 - Capital Gains

Consideration Other Than Cash. Agreement of Farmer-in.

Where the consideration given by the farmer-in is wholly or partly by way of rights (i.e. the work obligation or subordinated interests to a share of future profit), it is important that the agreement of the farmer-in to the value of the rights is obtained wherever possible. Otherwise, any value agreed with the farmer-out could be open to challenge in the event of a future disposal by the farmer-in of the rights and/or licence interest.

The Capital Gains Tax Regulations 1967 (SI67 No 149) deal with appeals and other matters relating to the agreement of the market value of an asset on a particular date, or the apportionment of an amount or value affecting the liability to capital gains tax of more than one person. If the Revenue advises the farmer-in that the valuation is under negotiation, he is bound by the determined value whether or not he chooses to be joined as a party. The farmer-in should be approached under Regulation 11 and advised of his rights under Regulation 8.

TCGA92\s8(5) applies TCGA92 (including its Regulations) to Corporation Tax on chargeable gains.