OT68090 - Transferable tax history - Onward sales - Retained decommissioning

Where there is an onward sale of a TTH asset, or part thereof, and as part of that onward sale, the original purchaser agrees to retain all or part of the decommissioning liability for the asset or part asset being transferred on, either, the original purchaser must retain all of the original TTH, or it is all transferred to the new purchaser, subject to the TTH cap. If the original TTH exceeds the new TTH cap, only the original TTH amount up to the value of the new cap may be transferred, but all of the relevant proportion of the original TTH amount is lost to the original purchaser.

If the original purchaser retains the decommissioning liability and the TTH, it must take account of the subsequent purchaser’s tracked profits, following the onward sale.

The original purchaser and the new purchaser will need to agree for those figures to be provided to the original purchaser as part of the terms of the sale. If there is a further onward sale, the subsequent purchasers will also need to provide those figures to the original purchaser holding the decommissioning liability and the TTH. This must be agreed commercially between the parties on sale.