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HMRC internal manual

Tonnage Tax Manual

From
HM Revenue & Customs
Updated
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Qualifying companies and ships: Effect of change of use

Ceasing to satisfy all conditions

A ship that ceases to satisfy all the conditions described in TTM03500 will normally cease to be a qualifying ship. For example:

  • A cross channel ferry will normally cease to be a qualifying ship when it begins to be used as a river ferry, since river ferries are specifically excluded, (see TTM03640).
  • A cruise liner will normally cease to be a qualifying ship when it begins to be used as a floating hotel, since use as a floating hotel does not come within the permitted uses in FA00/SCH22/PARA19 (1)(a) - (d), (see TTM03500).

There is an exception where a ship is used for a very short period for a non qualifying purpose. For further information see TTM03710.

If, as a result of a change in use of a ship, a company ceases to operate qualifying ships for a short period, the company may make an election to remain in tonnage tax. For further information see TTM03050.

References

FA00/SCH22/PARA22 (effect of change of use) TTM17121
   
Ship is used for a very short period for a non qualifying purpose TTM03710
Company ceases to operate qualifying ships for a short period TTM03050