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HMRC internal manual

Tonnage Tax Manual

Capital allowances: Entry into tonnage tTax (P&M)

Mixed use asset acquired before entry

A company may have an item of machinery or plant which, after election into the regime, will be used partly for its tonnage tax trade and partly for another (non tonnage tax) trade purpose.

In such a case, the asset should be treated as if it started to be used partly for a non-trade purpose as at the company’s date of entry into tonnage tax. The normal capital allowance consequences of such a change in use will follow (see CA23250 and CA23030), with the use for the purposes of the company’s tonnage tax trade being treated as a non-trade purpose.

(NB: None of the expenditure relating to such an asset goes into the tonnage tax pool.)

See TTM09100 for details of the treatment of mixed-use assets acquired after entry into tonnage tax.


FA00/SCH22/PARA70 (assets used partly for tonnage tax trade) TTM17391
Tonnage tax pool TTM09010