EXPLANATORY NOTE

1. This clause ensures that PRT relief continues to be restricted in line with the provisions of clause 86 when a company that has sold and leased back a North Sea asset subsequently transfers its interest in the relevant oil field to another company, and the leasing of the asset is continued by that other company.

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2. Subsection (1) applies clause 86 where the sale and leaseback of an asset is followed by a transfer of field interest, and the company acquiring the field interest continues the use of the asset under a new lease.

3. Subsection (2) applies clause 87 to the company that has newly acquired the field interest as if it were the company that originally sold and leased back the asset, and as if the new lease for the use of the asset were the original lease. As a result, the new lessee steps into the shoes of the previous lessee and inherits his cap on lease payments and history of lease payments already allowed.

4. Subsection (3) ensures that the clause also applies to any subsequent transfers of an interest in the field and that any lease payments made by any participator in the chain of owners of the field interest are taken into account when determining whether the cap on allowable lease payments has been reached.

5. Subsection (4) deals with partial transfers of field interest. Where a company transfers a proportion of its field interest to another company, the transferee inherits the appropriate proportion of the transferor’s cap and of the lease payments already made by the transferor, including any lease payments or restrictions on relief that the transferor has itself already inherited.

6. Subsection (5) and Subsection (6) define terms to ensure that the clause operates effectively when there is a series of transfers of field interest involving successive leases of the asset.

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