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HMRC internal manual

Tonnage Tax Manual

From
HM Revenue & Customs
Updated
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Chargeable gains: Time-apportionment

When an asset is disposed of, and that asset is (or has been) a tonnage tax asset, only the gain or loss referable to the time when it was not a tonnage tax asset is brought into account for tax purposes as a chargeable gain or allowable loss.

Computation of gain or loss

The gain or loss to be brought into account for tax purposes is calculated:

  • by time apportioning the total gain or loss arising (calculated by reference to the normal CGT rules)
  • by reference to the time that the asset was used outside tonnage tax
  • as a proportion of the total time that the asset was owned by the company.

See TTM08210 for details of how the chargeable gain or allowable loss is to becalculated.

Intra-group transfers

Where the asset has been transferred around a group in such circumstances that each disposal fell to be dealt with under the no gain/no loss rules in TCGA92/S171(1) (see CG45300 onwards), the time apportionment is made by reference to the total time that the asset was owned by the group.

References

FA00/SCH22/PARA65 (disposal of tonnage tax asset) TTM17366