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HMRC internal manual

Tonnage Tax Manual

The ring fence: Reliefs and deductions

Pre-tonnage tax losses

A company may have unrelieved trading losses on hand at the time it enters the tonnage tax regime. It may only carry these forward to the extent that they arise from activities that do not form part of its tonnage tax trade once it is within Tonnage Tax (broadly speaking, its non shipping activities).

Shipping losses extinguished

Any trading losses arising from activities that do become part of the tonnage tax trade are effectively extinguished when the company enters Tonnage Tax, per FA00/SCH22/PARA56.

Losses after Tonnage Tax

The trading losses are not reinstated when a company leaves Tonnage Tax.


Where a non-tonnage tax trade continues outside the ring fence after entry into Tonnage Tax, an apportionment of losses brought forward should be undertaken on a just and reasonable basis to exclude those relating to the tonnage tax trade.

Capital losses

See TTM08020 on the differing treatment for CGT losses.


FA00/SCH22/PARA56 (exclusion of loss relief) TTM17321