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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

Enterprise Management Incentives (EMI): Excluded activities: Leasing of certain ships

Leasing, including letting ships on charter or other assets on hire, is an excluded trade for EMI, with the exception of the leasing of certain ships.

The leasing or chartering of ships is a qualifying trade if all the following conditions are satisfied:

  • the ship let on charter by the company is beneficially owned by the company,
  • every ship beneficially owned by the company is registered in the UK,
  • the company is solely responsible for arranging the marketing of the service of its ships,
  • every letting of ships by the company is for a period of 12 months or less and there is no provision to extend this other than by the choice of the person chartering the ship,
  • every letting is an arm’s length transaction between the company and an unconnected person, except where the letting is between the company and a qualifying subsidiary or between 2 qualifying subsidiaries, and
  • the terms of every letting make it clear that, throughout the period of the charter, the company is responsible for taking all management decisions relating to the ship and paying all expenses in connection with it, other than those incidental to a particular voyage, and no arrangements exist by which another person can be appointed to take over these responsibilities.


For these purposes, ships do not include offshore installations (such as oil rigs) or pleasure craft. Pleasure craft means any ship of a kind primarily used for sport or recreation, (Paragraph 18).