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HMRC internal manual

Tonnage Tax Manual

Chargeable Gains: Tonnage tax assets

Tonnage tax assets: Meaning

A ‘tonnage tax asset’ is an asset that is used wholly and exclusively for the purposes of the tonnage tax activities of a tonnage tax company (paragraph 64(1)).

(This definition is extended to include an asset used wholly and exclusively for the purposes of the tonnage tax activities of a corporate partnership, of which the company is a member, see TTM13200).

Asset which is part of a larger asset

An asset that is used partly for tonnage tax activities and partly for other purposes will not normally be a tonnage tax asset. However, where a readily identifiable part of an asset is used wholly and exclusively for tonnage tax activities for a continuous period of at least twelve months, it partly qualifies as a tonnage tax asset.

In such a case, the part asset is treated as if it were a separate asset in applying the tonnage tax rules as from the later of:

  • the date that the asset was acquired, or
  • the date that the company became a tonnage tax company.

Where it is necessary to apportion the gain or loss on the whole asset in order to calculate the gain or loss attributable to the part which is a tonnage tax asset, and the part which is not, the apportionment is to be made on a just and reasonable basis (paragraph 64(3)).

An asset of tonnage tax company is not necessarily a tonnage tax asset

Not every asset owned by a tonnage tax company will be a tonnage tax asset. See TTM08120 for examples.

Asset owned by one company and used by another

See also TTM08110 for details of how the definition applies to an asset which isowned by one company in a group, but used by another company in the same group.


FA00/SCH22/PARA64 (chargeable gains: tonnage tax assets) TTM17361