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HMRC internal manual

Tonnage Tax Manual

Partnerships: Capital allowances

On exit from tonnage tax: Procedure

The unrelieved qualifying expenditure to be included in a partnership capital allowances pool as at the start of the period in which a partner leaves tonnage tax is given by the formula:

(A% x B) + ((100% - A%) x C)


  • A is the share in partnership property of the partner leaving tonnage tax. (see TTM13460 for what to do if that share has varied over time).
  • B is the amount of qualifying expenditure that would have been available to the partnership on the assumption that it was a company leaving tonnage tax at the start of the accounting period in which the partner actually left the regime (see TTM09300for the method of computation)
  • C is the amount of unrelieved qualifying expenditure (excluding any part of that amount that represents postponed allowances) that would otherwise have been used in the partnership computations by the non-tonnage tax partners. (But see TTM13440for the adjustments to be made if any allowances have been postponed under CAA01/S131 (previously CAA90/S30 or CAA90/S31)).

Where, exceptionally, C is not defined (because all the other partners were either tonnage tax companies, or persons outside the charge to tax in the UK), then the amount of unrelieved expenditure is the full amount of B.


SI00/2303/REG8(5)-(6) (CA formula when partner leaves tonnage tax) TTM18008