TTM11240 - Offshore activities: Offshore profits
Pre-commencement losses: Example
A company operating a heavy lift crane barge enters tonnage tax on 1 January 2012.
The barge is a vessel with mounted cranes used for lifting heavy loads and on occasions is also used for transporting heavy loads.
The company has unrelieved accumulated trading losses arising from its trade of operating this vessel in the period prior to entry.
The accumulated losses relating to the period prior to entry will need to be split between:
- losses relating to the element of its trade which are attributable to periods when the ship was engaged in offshore activities, and
- losses relating to the element of its trade which are attributable to periods when the ship was engaged in activities which were not offshore activities.
The losses in b. will not be available for loss relief in any period beginning on or after 1 January 2012.
The losses in a. will be available for relief against any profits of the trade that are chargeable to tax under the normal corporation tax rules outside the ring fence.
References
| Pre-commencement losses | TTM11230 |