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HMRC internal manual

Tonnage Tax Manual

HM Revenue & Customs
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Capital gains: Tonnage tax assets

Asset which is not a tonnage tax asset

Not all the assets owned or used by a tonnage tax company will be tonnage tax assets (as defined in TTM08100).

For example:

  • An asset (other than real property) which is leased or hired to a tonnage tax company cannot be a tonnage tax asset of that tonnage tax company. In such a case the asset is being used for the purposes of the trade of the lessor or hirer.
  • Shares in another company (and other investments) can never be tonnage tax assets, as they are not used for tonnage tax activities, even though certain dividends received could be within relevant shipping profits.

The normal capital gains tax rules will apply to assets that are not tonnage tax assets: in particular:

  • the chargeable gains or allowable losses arising on disposal of non-tonnage tax assets will fall to be calculated under the normal rules (without any time apportionment under the tonnage tax rules); and
  • chargeable gains may be rolled-over against expenditure on non-tonnage tax assets in the normal way.