Where a company carries on a trade which involves any activity of oil extraction, the acquisition, enjoyment or exploitation of oil rights, any such activities are treated as a separate trade (CTA 2010, s. 279). Income from those activities and rights is known as ‘ring fence income’ (CTA 2010, s. 275).

Sideways or carry-back relief for trade losses (see ¶730-150 and ¶730-200) is only available against ring fence income to the extent that the loss arises from oil extraction activities or from oil rights (CTA 2010, s. 304(1)).

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