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HMRC internal manual

Tonnage Tax Manual

Exiting tonnage tax: Types of exit

Voluntary exitsVoluntary exits from the tonnage tax regime may be for four possible reasons:


  • Expiry of election (FA00/SCH22/PARA13 (1); see TTM14010), or
  • A withdrawal notice takes effect under FA00/SCH22/PARA15A; see TTM14080, or
  • Ceasing to be a qualifying company or group (FA00/SCH22/PARA16; see TTM14020), or
  • Operation of the merger provisions (where no dominant party: FA00/SCH22/PARA123 (4); see TTM14040).

Forced exitsForced exits from the tonnage tax regime may be for three possible reasons:


  • Operation of the merger provisions (where QNT is dominant party: FA00/SCH22/PARA123 (3); see TTM14050), or
  • Exclusion for failing to meet 75 per cent test on charters-in (FA00/SCH22/PARA39 and PARA40; see TTM14060), or
  • Exclusion for tax avoidance (FA00/SCH22/PARA42; see TTM14070).

Exit chargesOnly where the exit is for reasons relating wholly or mainly to tax, or there is expulsion for tax avoidance, is there a specific exit charge under

FA00/SCH22/PARA137 onwards; see TTM14200.


FA00/SCH22/PARA13 (period for which election is in force) TTM17061
FA00/SCH22/PARA15A (withdrawal notices) TTM14080
FA00/SCH22/PARA16 (qualifying companies and groups)) TTM17086
FA00/SCH22/PARA39 (exclusion of company if 75 per cent limit exceeded) TTM17236
FA00/SCH22/PARA40 (exclusion of group if 75 per cent limit exceeded) TTM17241
FA00/SCH22/PARA42 (exclusion for tax avoidance) TTM17251
FA00/SCH22/PARA123 (merger of T and QNT) TTM17691
FA00/SCH22/PARA137 (withdrawal of relief) TTM17761