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HMRC internal manual

Tonnage Tax Manual

Relevant shipping profits: Distributions from qualifying overseas shipping companies

Subject to tax

In FA00/SCH22/PARA49 (2)(f) there is a condition that the profits from which the dividends are paid must be subject to tax (see TTM06410).

This test may still be satisfied even if there is no actual liability to tax on those profits (for example because of the operation of loss relief), so long as the profits in question are ‘subject to a tax on profits’.

The rules of computation for tax purposes of those profits are also immaterial - for example, dividends paid by a company within a comparable tonnage tax regime in another country would satisfy the ‘subject to a tax’ test.


FA00/SCH22/PARA49 (2)(f) (subject to tax test) TTM17286