TTM13400 - Partnerships: Capital allowances

On entry into tonnage tax

As explained in TTM13020, each tonnage tax company in the partnership calculates its partnership profits on the basis of a single computation worked out using the tonnage tax rules.

The rules relating to the treatment of capital allowances on entry to tonnage tax will apply from the date that the partnership first includes a tonnage tax company as a member (either because an existing member enters tonnage tax, or because a tonnage tax company becomes a member).

Those provisions will apply as if the partnership were a company that became a tonnage tax company on that date. The period for phasing out capital allowance balancing charges will also run from that date.

If other corporate partners become tonnage tax companies at a later date, or if tonnage tax companies join the partnership, those companies will simply change from computing their share of the profits on normal lines to computing their share of the profits on tonnage tax lines.

References

Plant & machinery: Entry: The tonnage tax (frozen) pool	TTM09010