Exiting tonnage tax: Effects of exiting tonnage tax regime
Ten year disqualification
No re-entry into tonnage tax for 10 years
For all cases, except on expiry of an election, there is a ten-year disqualification from re-entry into tonnage tax under FA00/SCH22/PARA137 (3). The ten years will run from the first day after leaving tonnage tax. If a further window of opportunity were offered for entry into the regime, a company could still not re-enter if any part of its first accounting period following re-entry into tonnage tax would fall within the 10-year disqualification period.
Exception to 10-year rule
The only exception to this rule is where, under the merger rules, either:
- an ex-tonnage tax group or company were taken over by a tonnage tax group or company which was the ‘dominant party’ or, there being no dominant party, which could elect to be so (FA00/SCH22/PARA123), or
- an ex-tonnage tax group or company were taken over by a non-qualifying group or company which was the ‘dominant party’ (PARA125).
In those limited circumstances an ex-tonnage tax company can re-enter tonnage tax before the expiry of its 10 year disqualification.
(NB The 10 year disqualification does not apply to a company which remains in a group which continues to be a tonnage tax group (because at least one other company in the group is a tonnage tax company), see TTM14030.)
|FA00/SCH22/PARA140 (ten year disqualification from re-entry)||TTM17776|
|FA00/SCH22/PARA137 (company ceases to be tonnage tax company)||TTM17761|
|FA00/SCH22/PARA123 (merger between T and QNT)||TTM17691|
|FA00/SCH22/PARA125 (merger between NQ and QNT)||TTM17701|
|Merger between T and QNT||TTM12320|
|Merger between NQ and QNT||TTM12340|