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HMRC internal manual

Tonnage Tax Manual

The ring fence: Reliefs and deductions

ACT and shadow ACT

As described in TTM07210, unrelieved surplus ACT may not be set of against tax chargeable which is attributable to a company’s tonnage tax profits (or which is attributable to the tonnage tax profits of a CFC which have been apportioned to a company

under step 3 in TIOPA10/S371BC (1).

Conversely, per FA00/SCH22/PARA57 (5), a company’s tonnage tax profits are to be left out of account in determining the company’s profits charged to corporation tax for the purposes of the shadow ACT regulations (FA98/S32 and SI99/358).

But this does not affect the computation (under those Regulations) of shadow ACT on distributions made by a tonnage tax company, whether paid out of tonnage tax profits or other profits.


FA00/SCH22/PARA57 (5) (ACT and shadow ACT) TTM17326