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HMRC internal manual

Tonnage Tax Manual

From
HM Revenue & Customs
Updated
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Relevant shipping profits: Relevant shipping income

Examples

Example1

Interest arising from the proceeds of sale of a ship held on deposit whilst a replacement ship is sought.

This will not satisfy the conditions (TTM06510), and such interest will be assessable outside the ring fence.

Example 2

Interest arising on a deposit for the purchase of a ship.

This will not satisfy the conditions and such interest will be assessable outside the ring fence.

Example 3

Shipping is an international trade and trading contracts are often denominated in currencies other than sterling.

Exchange gains or losses on such contracts will normally fall to be included in relevant shipping income.

Example 4

An exchange gain on a currency futures contract entered into in order to hedge the exchange risks inherent in, say, a contract for the acquisition of a new ship to be used in the tonnage tax trade.

This will fall to be included in relevant shipping income.

Example 5

A gain on a speculative futures contract.

This would fall outside the ring fence

References

FA00/SCH22/PARA50 (certain interest etc) TTM17291