Taxes Consolidation Act 1997 Schedule 1 paragraph 4

Exemption

Paragraph 4 of Schedule 1 provides an exemption from the licence holder collection mechanism where the relevant profits arose under a pre-1973 contract.

• The collection power in paragraph 2 does not apply where the assessed profits arose from a contract made by the licence holder before 16 May 1973
• This exemption protects exploration companies whose tax liabilities stem from longstanding pre-1973 agreements
• The exemption is lost if the person assessed is connected with the licence holder
• The exemption is also lost if the original contract was varied on or after 16 May 1973