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HMRC internal manual

Tonnage Tax Manual

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HM Revenue & Customs
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Partnerships: Capital allowances

On exit from tonnage tax: Compensatory payments between partners

TTM13420 and TTM13440 describe the way that the other partners’ future entitlement to capital allowances may be affected when one of the partners leaves tonnage tax.

If the other partners are disadvantaged by the tonnage tax company leaving the regime, it is open to them to seek a payment from the tonnage tax company in compensation.

If such a payment is made, it is to be disregarded in computing the profits or losses of both the payer and the recipient for tax purposes, and does not count as a distribution or a charge on income.

References

SI00/2303/REG8 (9) (compensation payments between partners) TTM18008
   
Variation in share of partnership property TTM13460