OT60085 - Transferable Tax History - Adjustments to the Net Cost Amount

»Ê¹ÚÌåÓýapp net cost amount must be adjusted before it is doubled to arrive at the UDCE, which caps the amount of TTH that can be transferred.

»Ê¹ÚÌåÓýappse adjustments are there to ensure that the cap is applied consistently which reduces the scope for manipulation.

»Ê¹ÚÌåÓýapp following adjustments must be made:

  • Any adjustment for discounting should be removed.
  • Any risk factor or other assumptions about possible risk of cost increases should be removed.
  • Any adjustment for inflation should be removed, and replaced with a ‘standardised inflation adjustmentâ€� in line with HMRC guidance at OT60090.

»Ê¹ÚÌåÓýappse adjustments ensure that all companies are working from the same basic position, which is a reasonable estimate of the costs of decommissioning. »Ê¹ÚÌåÓýapp doubling of the adjusted net cost amount to arrive at the UDCE is intended to allow for the risk that costs are uncertain and could increase. This provides a generous cap which at the same time puts companies on an even footing.