Common use of CT Adjustments Clause in Contracts

CT Adjustments. 12.7.1 The Purchase Price shall be increased by the Purchaser paying to the Seller an amount equal to any CT paid by the Seller on any receipts taken into account, using the Accruals Basis of Accounting, for the purposes of Clause 3.7, the Petroleum Sales Adjustment. 12.7.2 The Purchase Price shall be decreased by the Seller paying to the Purchaser an amount equal to any CT relief received by the Seller on any cash calls paid and any expenditure taken into account, using the Accruals Basis of Accounting, for the purposes of Clause 3.6, the Cash Calls Adjustment and Clause 3.8, the Interim Period Adjustment. 12.7.3 The Parties recognise that adjustments under this Clause 12.7 are notional adjustments, as opposed to actual payments of, reliefs from or reductions in CT liabilities. For the purpose of calculating these notional adjustments it shall be assumed that both the Seller and the Purchaser are single companies with no brought forward losses who are paying CT at the standard rate applicable for the period concerned. Such notional adjustments shall be effected by deducting from each relevant payment a notional CT charge. In calculating the notional CT charge, the CT rate to be used will be the rate which applies at the end of the month in which the receipt or payment arises, or if the rate of CT changes during a month the arithmetic mean of the rates applicable for that month shall be used. 12.7.4 If the Parties cannot reach agreement on all or part of the adjustments referred to in this Clause 12.7 within thirty (30) Business Days of receipt by the Purchaser from the Seller of the Seller’s estimate of such adjustments, the adjustments in dispute may be referred by either the Seller or the Purchaser for determination by an independent expert nominated by the Parties or, in the absence of agreement between the Parties within five (5) Business Days of a Party notifying the other that it proposes to refer the dispute to an expert, by the President of the Institute of Chartered Accountants in England and Wales on the application of either the Seller or the Purchaser. Within twenty (20) Business Days after the appointment of such expert, each Party may submit to the expert a statement of the nature of the dispute, a description of the submitting Party’s claims with respect thereto, and any other supporting documentation or materials with respect thereto that the submitting Party desires the expert to consider. The Party submitting such statement shall provide a copy thereof to the other Party, who shall have ten (10) Business Days from receipt thereof to submit a responding statement to the expert. The nominated expert shall be afforded such access to books, records, accounts and documents in the possession of the Parties as he may reasonably request, and he shall act as expert not as arbitrator. The said expert’s determination shall, in the absence of fraud or manifest error or bias, be final and binding on the Parties, his fees and disbursements shall be borne by the Seller and the Purchaser in equal shares and the Parties shall bear their own costs in respect of such reference.

CT Adjustments. 12.7.1 The Purchase Price shall be increased by the Purchaser Buyer paying to the Seller an amount equal to any CT paid by the Seller on any receipts taken into account, using the Accruals Basis of Accounting, for the purposes of Clause 3.7, the Petroleum Sales Adjustment. 12.7.2 The Purchase Price shall be decreased by the Seller paying to the Purchaser Buyer an amount equal to any CT relief received by the Seller on any cash calls paid and any expenditure taken into account, using the Accruals Basis of Accounting, for the purposes of Clause 3.6, the Cash Calls Adjustment and Clause 3.8, the Interim Period Adjustment. 12.7.3 The Parties recognise that adjustments under this Clause 12.7 are notional adjustments, as opposed to actual payments of, reliefs from or reductions in CT liabilities. For the purpose of calculating these notional adjustments it shall be assumed that both the Seller and the Purchaser Buyer are single companies with no brought forward losses who are paying CT at the standard rate applicable for the period concerned. Such notional adjustments shall be effected by deducting from each relevant payment a notional CT charge. In calculating the notional CT charge, the CT rate to be used will be the rate which applies at the end of the month in which the receipt or payment arises, or if the rate of CT changes during a month the arithmetic mean of the rates applicable for that month shall be used. 12.7.4 If the Parties cannot reach agreement on all or part of the adjustments referred to in this Clause 12.7 within thirty (30) Business Days of receipt by the Purchaser Buyer from the Seller of the Seller’s estimate of such adjustments, the adjustments in dispute may be referred by either the Seller or the Purchaser Buyer for determination by an independent expert nominated by the Parties or, in the absence of agreement between the Parties within five (5) Business Days of a Party notifying the other that it proposes to refer the dispute to an expert, by the President of the Institute of Chartered Accountants in England and Wales on the application of either the Seller or the PurchaserBuyer. Within twenty (20) Business Days after the appointment of such expert, each Party may submit to the expert a statement of the nature of the dispute, a description of the submitting Party’s claims with respect thereto, and any other supporting documentation or materials with respect thereto that the submitting Party desires the expert to consider. The Party submitting such statement shall provide a copy thereof to the other Party, who shall have ten (10) Business Days from receipt thereof to submit a responding statement to the expert. The nominated expert shall be afforded such access to books, records, accounts and documents in the possession of the Parties as he may reasonably request, and he shall act as expert not as arbitrator. The said expert’s determination shall, in the absence of fraud or manifest error or bias, be final and binding on the Parties, his fees and disbursements shall be borne by the Seller and the Purchaser Buyer in equal shares and the Parties shall bear their own costs in respect of such reference.