UK Chancellor looks to spur M&A activity in North Sea oil
Hammond said the tax history of an oil and gas field in the region can be transferred when sold, meaning buyers can claim more relief when the asset eventually winds down and decommissioning activities begin.
From November 2018, the government will introduce 'Transferable Tax History' for transfers of oil and gas fields in the North Sea.
"An innovative tax policy that will encourage new entrants to bring fresh investment to a basin that still holds up to 20 billion barrels of oil," said the chancellor.
Firms can currently claim tax relief on the costs of decommissioning - such as plugging wells and removing infrastructure - but the amount varies based on the amount of tax previously paid on the assets. ■